Why card payment fees feel confusing
Most UK merchant statements list eight to fifteen different charges. Some are percentages of turnover, some are flat monthly amounts, and some only appear when something is missing - a PCI self-assessment, for example, or a minimum monthly threshold.
Once you know what each fee is for, the statement becomes much easier to read and you can quickly spot the line items that actually move your overall cost.
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Start free reviewThe main fees you'll see
Transaction fee (the rate)
A percentage of each card payment, often split by card type. A small UK retailer on blended pricing might see 0.7%-1.2% on consumer debit and 1.6%-2.4% on commercial or international cards.
Authorisation fee
A small fixed charge per transaction, typically 1p-5p. Low-ticket businesses (cafes, takeaways) feel this most because it lands on every sale regardless of value.
Monthly service / account fee
A flat monthly charge for the merchant account, usually £10-£25. Some providers waive it; others bundle PCI and gateway fees into it.
Terminal rental
Hire for your card machine, commonly £15-£30 per terminal per month. Often on a separate, longer agreement than the merchant contract itself.
PCI compliance fee
An annual or monthly fee covering the PCI DSS programme. A non-compliance fee (often £20-£40 per month) applies if the self-assessment lapses.
Minimum monthly service charge
A floor charge if processing volume falls below an agreed level. Seasonal businesses can be caught by this in quiet months.
Scheme and interchange fees
Pass-through costs set by Visa and Mastercard. On Interchange Plus pricing they appear separately; on blended pricing they're rolled into the headline rate.
Gateway / online payment fees
If you take payments online, the gateway provider adds a small per-transaction fee on top of the merchant rate, plus a monthly gateway charge.
A simple worked example
A small cafe takes £12,000 in card payments in a month across 1,800 transactions. Their statement shows a 0.8% consumer rate, a 2p authorisation fee, a £15 monthly account fee and £18 terminal rental.
Card fees: £96 (transaction) + £36 (authorisation) + £15 (account) + £18 (terminal) = £165. Effective rate: £165 / £12,000 = 1.375%.
The headline rate quoted was 0.8%, but the real cost - the effective rate - is closer to 1.4%. That gap is normal, but it's the number that actually matters when you compare providers.
What a reasonable range looks like
There's no single 'right' rate - it depends on your turnover, average transaction value, the mix of card types and whether you take payments in person or online. As a rough guide for a typical UK SME on a blended price:
Consumer debit cards: 0.6%-1.2%. Commercial and international cards: 1.5%-2.5%. Authorisation fee: 1p-5p. Terminal hire: £15-£30 per month. Monthly account fee: £0-£25.
If your effective rate is well above 2% on a mostly consumer-debit mix, it's usually worth a closer look.
Key takeaways
- ●Card payment fees split into percentage charges, flat per-transaction fees and recurring monthly charges.
- ●The effective rate (total fees / total card turnover) is the only number that lets you compare like with like.
- ●Authorisation fees and terminal rental matter much more for low-ticket and low-volume businesses than the headline rate suggests.