What a typical UK SME pays
Effective rates for UK small businesses commonly sit between 0.8% and 2.2%, depending on average transaction value, card mix and provider. There is no single 'fair' rate - it depends on the profile of the business.
What matters is whether the rate you're paying is reasonable for a business like yours, given the current market. A cafe with a low average ticket and mostly consumer debit cards has a very different cost floor to a B2B service firm invoicing corporate cards.
Unsure what these charges mean on your own statement? Submit it for a free independent review.
Check If I'm OverpayingTypical effective rate ranges by sector
| Business type | Typical effective rate | Main cost driver |
|---|---|---|
| Cafes and quick-service food | 1.1% – 1.8% | Low ticket + authorisation fees |
| Independent retail | 0.9% – 1.6% | Card mix and terminal rental |
| Restaurants and pubs | 1.0% – 1.7% | Premium/corporate card share |
| Hair and beauty | 1.1% – 1.9% | Low volume + monthly minimums |
| Trades (mobile) | 1.5% – 1.75% | Pay-as-you-go pricing |
| E-commerce | 1.4% – 2.5% | Gateway + card-not-present fees |
| B2B services | 1.6% – 2.6% | Commercial card mix |
Where the cost hides
Old rates that never got reviewed
Many SMEs are on rates set five or more years ago, while the market has moved.
Long terminal contracts
A £35/month terminal on a 48-month deal is £1,680 of committed cost.
Premium and international card surcharges
Particularly relevant in hospitality and tourist-area retail.
Non-compliance PCI fees
£20-£40/month applied when the annual self-assessment lapses.
Monthly minimums in quiet months
Seasonal or holiday-hit months quietly inflate the effective rate.
How to benchmark your own costs
Take your last three months of statements. Add every card-related line - transaction fees, authorisation, PCI, minimum, terminal, gateway, refund and chargeback fees - and divide by total card turnover. That is your effective rate.
Compare that number to the ranges in the table above. If you're sitting a full percentage point above the typical range for your sector, it is almost always worth a full review.
Frequently asked questions
What's a 'good' rate for a UK small business?
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Are the newer providers always cheaper?
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How often should I review my costs?
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Key takeaways
- ●Effective rate is the only honest benchmark.
- ●Review every 18–24 months at a minimum.
- ●Terminal hire and recurring fees usually explain more of the gap than the transaction rate itself.