Card processing fees are the cost of accepting card payments. Every time a customer pays by debit or credit card, the merchant pays a percentage of the transaction plus a fixed fee. Understanding how these fees work — and where the money goes — is the first step to managing your payment costs.
This guide breaks down UK card processing fees, explains the different pricing models, compares provider rates, and covers practical ways to reduce costs.
How Card Processing Fees Work
Every card transaction involves four parties, each taking a cut:
Interchange fee — Paid to the card-issuing bank (the customer's bank). Set by Visa and Mastercard. Typically 0.2-0.3% for UK consumer debit cards, 0.3% for credit cards (capped by EU regulation). International and corporate cards are higher — up to 1.5%+.
Scheme fee — Paid to the card network (Visa, Mastercard, Amex). Typically 0.02-0.15% plus a small per-transaction fee. These are non-negotiable.
Acquirer markup — Paid to your payment provider (the acquirer or PSP). This is the negotiable portion — and where providers differ significantly.
Gateway fee — Some providers charge a separate per-transaction fee for the payment gateway technology. Others bundle it in.
Total cost = Interchange + Scheme fees + Acquirer markup (+ Gateway fee if separate)
UK Card Processing Fees by Provider
Provider | Pricing Model | UK Debit | UK Credit | International | Per-Transaction Fee |
|---|---|---|---|---|---|
Stripe | Flat rate | 1.4% + 20p | 1.4% + 20p | 2.5% + 20p | Included |
Worldpay | IC++ or flat | From 0.75% | From 0.95% | Varies | 10p |
Adyen | IC++ | IC + 0.10-0.25€ | IC + 0.10-0.25€ | IC + 0.10-0.25€ | €0.11 |
Square | Flat rate | 1.75% (in-person) | 1.75% (in-person) | 2.5% (online) | Included |
SumUp | Flat rate | 1.69% | 1.69% | 2.5% | Included |
PayPal | Flat rate | 2.9% + 30p | 2.9% + 30p | 3.4% + 30p | Included |
IC++ = Interchange-plus-plus (interchange + scheme fee + provider markup). Rates as of February 2026.
Flat Rate vs Interchange-Plus: Which Is Cheaper?
For UK businesses, the answer depends on volume and card mix.
Flat Rate (Stripe, Square, SumUp)
Simple: same rate regardless of card type
Predictable: easy to forecast costs
More expensive at scale: you overpay on cheap transactions (UK debit) and the provider absorbs the cost on expensive ones (international corporate)
Interchange-Plus (Adyen, Worldpay, Checkout.com)
Transparent: you see exactly what the interchange cost is and what the provider charges on top
Cheaper at volume: UK consumer debit interchange is ~0.2%, so total cost can be 0.3-0.5% vs 1.4% on flat rate
Variable: costs fluctuate based on card mix, which makes budgeting slightly harder
Rule of thumb: Below £30,000/month — flat rate is simpler and the cost difference is small. Above £50,000/month — interchange-plus typically saves 0.5-1.0% per transaction, which compounds to thousands per year.
Hidden Costs to Watch For
Chargeback fees — £15-25 per chargeback dispute, regardless of outcome
Refund fees — Some providers keep the processing fee on refunded transactions
Currency conversion — 1-2.5% markup on cross-border or multi-currency transactions
PCI compliance fees — Some traditional providers charge £5-15/month for PCI self-assessment tools
Monthly minimums — Some providers require a minimum processing volume or charge a shortfall fee
Terminal rental — In-person card machines: £15-30/month depending on model
How to Reduce Card Processing Fees
1. Negotiate on volume
If you process over £50,000/month, ask for interchange-plus pricing. The acquirer markup is negotiable — especially if you can demonstrate consistent volume and low chargeback rates.
2. Encourage debit over credit
UK consumer debit interchange is capped at 0.2% vs 0.3% for credit. Debit cards save you money on every transaction.
3. Use local acquiring
Cross-border transactions (customer's card issued in a different country to the acquirer) attract higher interchange. Using a payment provider with local acquiring in your key markets reduces this.
4. Reduce chargebacks
Beyond the direct fee, high chargeback rates can trigger penalty programmes from card networks — increasing your base processing costs.
5. Review annually
Card scheme fees change twice a year (April and October). Provider markups can drift. An annual review of your effective rate (total fees ÷ total volume) ensures you're not overpaying.
Card Processing Fees for Platforms
If you're a software platform — processing payments on behalf of your merchants — the fee structure is more complex. You're managing costs across multiple merchants, potentially multiple PSPs, and potentially multiple countries.
Platforms typically need:
Interchange-plus pricing (flat rates eat into margin when you're earning revenue share)
Multi-PSP support (different merchants may need different providers)
Transparent fee passthrough to merchants
For platforms, the bigger cost isn't the processing fee — it's the integration and maintenance cost of supporting payment infrastructure. See How to Get Payments Off Your Product Roadmap for the full analysis.
FAQ
What is the average card processing fee in the UK?
For UK consumer debit cards: 0.3-1.4% depending on provider and pricing model. For credit cards: 0.5-1.4%. International cards: 1.5-3.0%.
Why are my card fees higher than advertised?
Common reasons: international cards in your mix (higher interchange), corporate cards (uncapped interchange), chargebacks, or currency conversion fees. Ask your provider for a breakdown by card type.
Can I pass processing fees to customers?
In the UK, surcharging consumers for card payments has been banned since January 2018. However, you can offer discounts for cash or bank transfer, or include processing costs in your pricing.
What's the cheapest way to accept card payments?
For low volume: Square or SumUp (no monthly fees, simple flat rate). For high volume: interchange-plus pricing from Worldpay, Adyen, or Checkout.com.
Need help choosing a payment provider? Compare payment providers or browse all supported gateways.