Headline rate vs effective rate
The 'rate' quoted in a sales conversation is almost always the headline consumer debit rate. It's the cheapest line on the price list and applies to a slice of your transactions, not the whole picture.
The number that actually matters is the effective rate: every card fee on your statement divided by your total card turnover. It includes scheme fees, authorisation fees, monthly account charges and any other recurring costs.
Unsure what these charges mean on your own statement? Submit it for a free independent review.
Check If I'm OverpayingTypical UK ranges by business type
High street retail
Mostly chip-and-PIN consumer debit. Effective rates of 0.9%-1.6% are common for established small businesses; newer or low-volume accounts often sit higher.
Hospitality (cafes, pubs, restaurants)
Lower average transaction values amplify authorisation fees. Effective rates of 1.1%-1.8% are common; tips and service charges don't usually change the rate.
E-commerce
Card-not-present rates are higher than in-person. Typical effective rates land between 1.4% and 2.5% once gateway and 3D Secure costs are included.
B2B and professional services
Higher average values but a heavier mix of commercial and corporate cards. Effective rates often sit between 1.6% and 2.6%.
Mobile / on-the-go traders
Pay-as-you-go readers (no monthly fee, no contract) typically charge a flat 1.5%-1.75% per transaction. Simple, but rarely the cheapest at higher volumes.
Blended pricing vs Interchange Plus
Blended pricing groups all card types into one or two rates. It's simpler to read but hides where the cost is going.
Interchange Plus shows the underlying interchange and scheme fees passed through at cost, plus a transparent provider margin. For businesses with reasonable volume or a high share of commercial cards, it can work out cheaper - but only if the margin is fair.
Neither model is automatically better. The right answer depends on your card mix and how much transparency you want.
How to sense-check your own rates
Pick your most recent statement and calculate the effective rate. Then compare it to the ranges above for your business type.
If you're well above the typical range, look at three things in order: terminal rental, monthly fixed fees, and authorisation fees on low-value sales. These three together often explain more of the gap than the percentage rate itself.
A free, independent statement review will do this for you - we look at the same numbers and explain them in the context of your statement.
What has changed since 2020
Post-Brexit scheme fees have risen materially on UK-EU card transactions. Regulated consumer interchange remains capped at 0.2% (debit) and 0.3% (credit), but Visa and Mastercard have added granular assessment, cross-border and authorisation fees on top.
Providers have absorbed some of this and passed on the rest. If your rate has not been reviewed since 2019-2020, there is a strong chance the pass-throughs have widened your effective rate without you noticing.
Frequently asked questions
Is 1% a 'good' rate?
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Why is my online rate so much higher than in-person?
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Do American Express rates count in my effective rate?
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Key takeaways
- ●Compare effective rates, not headline rates. The headline number rarely reflects what you actually pay.
- ●Typical UK effective rates sit between roughly 1% and 2.5% depending on business type and card mix.
- ●Terminal hire, monthly account fees and authorisation fees often explain more of a high rate than the transaction percentage itself.
- ●Rates set before 2020 usually deserve a fresh review given post-Brexit scheme fee changes.