Credit Card Processing Fees & Rates for UK Merchants 2023

Credit card fees can eat into your firm's profits - but how do you reduce them without impacting sales? Here's how to find the best deal from the top providers.

Our Research

Our expert team of writers and researchers worked to identify the best payment processing and merchant account providers by focusing on the factors small businesses care about most – value for money, including fees and hidden extras; security protocols and fraud protection; customer support, and ease of access across platforms including mobile.
Written and reviewed by:
Helena Young

Our independent reviews are funded in part by affiliate commissions, at no extra cost to our readers.

Any small business that accepts card payments has to also contend with the costly issue of merchant processing fees – which can quickly get confusing and expensive.

You can expect to pay anything from 1.5% to 3.5% with each payment, depending on the credit card your customer uses. There are also transaction fees which usually amount to 1-3% of sales, authorisation fees that take around 1-3p per sale, as well as merchant service fees of 0.25 to 0.35%.

The most important thing is to understand the exact rates you'll be dealing with for your own business. To help with this, you can use our 🔍free comparison tool to compare quotes from brands like Zettle, Square and more.

Below, we round up the typical credit card processing fees you'll encounter from the top card processing services:

Credit card processing providers and fees

  1. WorldPay – Transaction fees: 0.75%-2.75%
  2. Square – Transaction fees: 1.75% for contactless and inserted CHIP cards, 2.5% for other payments
  3. Zettle by PayPal – Transaction fees: 1.75% for contactless or card payments, 1.75% for PayPal payments, 2.5% for invoice transactions
  4. SumUp – Transaction fees: 1.69% for all card payments, 2.5% for invoice transactions
  5. Smartpay Anywhere – Transaction fees: 1.6% or bespoke
  6. takepayments –  Transaction fees dependant on business size and type

Click any of the links above or use our 🔍free comparison tool on payment processing services for your own business's size and needs.

The cost of living crisis is still gripping most businesses across the country. With that in mind, business owners are rightly asking themselves how to save even the slightest amount on fees and overheads.

As the below chart shows, rates vary dramatically depending on the provider you choose:

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Worldpay Reader

Square Reader

Zettle by PayPal


Smartpay Anywhere (by Barclaycard)

takepayments A920

Hardware cost

Terminal Fee £19/mo

Hardware cost

£19 + VAT

Hardware cost

Starting from £29 + VAT

Hardware cost

Starting from £29 + VAT

Hardware cost

£29 per month + VAT

Hardware cost


Transaction fees

2.75% + 0.20p

Transaction fees
  • 1.75% for contactless and inserted CHIP cards
  • 2.5% for other payments
Transaction fees
  • 1.75% for contactless or card payments
  • 1.75% for PayPal payments
  • 2.5% for invoice transactions
Transaction fees
  • 1.69% for all card payments
  • 2.5% for invoice transactions
Transaction fees

1.6% or bespoke (Barclaycard can work with you to work out a rate based on your needs)

Transaction fees

Rate varies depending on your business

PCI compliance

£29.99 per year

PCI compliance

None – Square handles this

PCI compliance

Free – Zettle handles this

PCI compliance

Free – SumUp handles this

PCI compliance

From £4.80 per month

PCI compliance

£35 per year

Other fees
  • Minimum monthly service charge of £15
  • PCI non-compliance fee of £29.99 per year
  • Chargeback fee of £15
Other fees
  • No minimum monthly transaction requirements
  • No refund charge
  • No early termination fee
  • No chargeback fees
Other fees
  • Up to £250 chargebacks/month covered for free
  • No refund fees
Other fees
  • No monthly fees and no contractual obligations
Other fees
  • Refund charge of 75p
Other fees
  • Monthly minimum service charge of £20
  • Chargeback fee of £9
  • Refund fee of 30p

The type of business you run will also impact how much you'll spend on fees. If you're running an ecommerce website for example, then Square has the lowest online rates. But Smartpay Anywhere (from Barclaycard) would likely be the best choice for a local brick-and-mortar store, since it has the cheapest flat-rate for CHIP and contactless payments.

For a more detailed breakdown of how credit card fees work, read on. Our expert guide will take you through what credit card processing fees are, how and when to pay them, and some handy tips on reducing them.

Find the card machine provider with the lowest processing fees Do you currently accept card payments? Compare quotes quickly and easily

What are payment processing fees?

The Sumup card reader at Jerry's, London

The Sumup card reader at Jerry's in London

Payment processing fees refer to the costs incurred by business owners when processing customer payments.

These fees are charged by payment processors, which are the companies or services that handle the transaction, to business owners who are responsible for paying these fees as part of their payment processing operations.

The specific costs depend on factors such as the level of risk associated with the transaction, the type of card being used, and the pricing model chosen by the payment processor.

How much are card processing fees?

The average credit card processing fee ranges between 1.5% and 3.5%, but can reach up to as much as 6% of each sale when you include all other transaction fees, such as authorisation fees.

What credit card processing fees do I have to pay?

Particularly post-Covid, the UK has become a largely cashless society. Consumers now expect to be able to pay for every product and service with plastic money – so card machines are an important technology to have in your small business.

Credit card machines like the card reader from Zettle or Square are devices that are now making credit card processing more affordable than ever for small businesses, thanks to their low price and credit card processing charges.

Still, there are a range of fees that you will inevitably encounter when taking card payments, even with the best small business merchant service providers. We've listed the main ones below:

Type of fee:Average cost:
Transaction fees1.5 - 3.5%
Amex transaction fees4 - 5%
Merchant account fees£5 - £15 per month
Service charges0.2 - 0.3%
Service fees£10 - £15 per month
Authorisation fees1p - 3p
Card machine £30 - £80
Setup£100 or less
How can I save money on card processing fees?

Having so many different fees to settle makes it difficult to keep costs low. To help you out, our experts have designed a 🔍free online comparison tool that will compare deals from the top credit card merchant providers based on your specific industry and business requirements.

Credit card processing fees: explained

The Zettle card reader at Shrubs And Dubs in London

So now you know the credit card fees you're likely to be charged when taking card payments. But what exactly are you being charged for?

What is a transaction charge?

Every time you take a debit or credit card payment, there'll be a small charge, usually not more than 3.5%.

There is no hard and fast rule for credit card transaction fees for merchants – they tend to vary according to the type of card used and the payment method.

As a general rule:

  • Charges for credit cards are higher than debit cards
  • In-person payments are usually lower than online

There are further implications depending on the different payment types. For example:

  • Credit cards: 1.5% and 3.5%
  • Business credit cards: 1.6% to 1.8%
  • Debit cards: 0.25% to 0.35%

Square charges 1.75% for card payments, but 2.5% for cardless payments. 

Has Brexit impacted transaction fees?

Many card merchants charge more for transactions completed outside the EU. Luckily for UK sellers, most big-name providers including Square and Mastercard have extended this policy to UK card transactions post-Brexit. However, it's worth checking this with your provider beforehand.

What is an Amex fee?

You'll be charged an Amex fee if you accept American Express credit cards. With Amex, you need to apply separately to the company itself, and you’ll be paying 1-2% percent more in your credit card transaction charges. That’s why many small business choose not to accept Amex. 

What is a card payment method?

How your customers pay can also impact the credit card processing charges to retailers. With some contracts it matters whether you are tapping, inserting, swiping or keying in their payment card.

This is because of the different levels of security risk associated with various credit card processing methods.

When the physical card is not present, for example, the credit card company charges merchants more, as they are accepting more risks. That's why Square charges 1.25% higher in transaction fees for cardless payments.

What are merchant account fees?

Merchant accounts are a checking bank account which you need to have to be able to take card payments. Many charge fees of around £5 to £15 a month. Some (such as Zettle by PayPal and Square) have no monthly fees which could keep costs lower for small businesses, but then often their transaction fees are slightly higher.

Think of the merchant account like a holding pen for your customers’ card payments to sit in, while the cash gets authorised and transferred to your personal or business account. This process usually takes a couple of working days, but can be instant with services such as PayPal Here, for example.

Want to find the best merchant account quotes? Use our specially-designed 🔍free comparison tool to get a bespoke recommendation based on your industry and business needs.

What is a merchant service charge?

You may have heard of merchant service charges as interchange rates or discount rates. These are the fees charged by banks to cover their costs in accepting credit card transactions. They typically range between 0.2-0.3%.

How much do card machines cost?

Card machine costs range from £19.20 (Square card reader) to as much as £100. The number of card payment terminals you require will affect these upfront costs – for example if you’re running a busy restaurant, you may need more than one license which can result in additional costs.

When it comes to the cost of card readers, different providers offer various pricing models. Some may require an upfront payment, while others offer reader rental options for a monthly fee.

Card readers can range from around £80 to £100 or more if you pay upfront.

This style of payment is ideal for businesses that have a steady cash flow and available upfront capital. It offers long-term cost savings by eliminating recurring monthly fees. This option is particularly advantageous for businesses with high transaction volumes, as it often results in lower per-transaction fees compared to rental plans.

Monthly card reader rentals typically range from £19 to £29 per month, depending on the provider, type of reader, and additional services included. This style would be well-suited for businesses that have limited upfront capital or experience uncertain cash flow, and allows for a lower initial investment by spreading the cost over time.

Monthly rental plans often come with additional benefits such as equipment upgrades, maintenance, or customer support included in the rental fee. This also can prevent small businesses from paying for unused equipment and provides flexibility to adapt as their needs evolve.

Ultimately, the decision should be based on factors such as your budget, transaction volume, flexibility needs, and long-term financial goals. It can be helpful to compare the costs, features, and terms offered by different providers to determine which option aligns best with your business requirements.

Here are some examples of card reader fees:

  • Worldpay: £19 per month
  • Square: £19 + VAT
  • Zettle: £29 + VAT
  • SumUp: £29 + VAT
  • Smartpay Anywhere: £29 per month

What are minimum monthly service fees?

Depending on the nature of the contract with your processor, you may have a minimum amount you will be charged each month if your transactions do not raise enough in fees.

Typically, this is in the region of £10 to £20 per month.

What are transaction authorisation fees?

The first stage of card processing involves the card issuer authorising the payment. There is a charge for this on every transaction. It will typically be around 1p to 3p per transaction.

Find the card machine provider with the lowest processing fees Do you currently accept card payments? Compare quotes quickly and easily

What are setup costs?

Depending on the nature of your merchant account and your provider, you might face a one-off fixed fee for setting up card processing – it's just like a membership for joining a gym.

This can range from £50 to £100, although few credit card processing companies charge these nowadays.

What is a PCI compliance fee?

PCI compliance is a countrywide fraud prevention method. It costs between £2.50 and £5 per month.

This is a small charge to ensure you are compliant with payment card industry data security, and will cover your PCI self-certification questionnaire and compliance certificate.

Some providers, like Square and Zettle, take on the PCI risk themselves. Purchasing a plan with these providers is an easy way to save money.

Are there any hidden fees?

On top of the credit card processing fees, you might like any extra services such as chargebacks, sending invoices or accepting international payment cards.

As you might expect, these optional add-ons will depend on your contract, but to give you an idea:

  • Chargebacks (when a bank has to withdraw money from your account to return it to a customer) generally cost between £10 and £20
  • Invoices and foreign card processing often add a percentage point to the credit card processing fee
  • Refunds (when you voluntarily return money from your business account to a customer) generally cost between 30p to £1

Next steps

The Square card reader at 'Got That Crystal' shop in London

The Square card reader at ‘Got That Crystal' shop in London

Now you know what the main card processing fees are, how much you can typically expect to have to spend, as well as what some of the most common hidden charges are. Your next step now is to find the right provider to save you the most money when taking payments.

PayPal and Square are great for growing businesses, while companies like Barclaycard and Worldpay (voted the best payment gateway provider this year) are generally more appropriate for larger companies with consistently high revenue.

But to find the best, most suitable provider for your business, it is important to 🔍compare quotes from as many merchant account service providers as possible.

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Credit card processing fees: FAQs
  • Who pays payment processing fees?
    Typically, merchants pay the payment processing fees. It's a common practice, but it's always good to check your agreement to be sure.
  • Do card machines charge per transaction?
    Yes, most card machines do charge per transaction. Each time a customer makes a purchase, there's a small fee associated with processing that transaction securely.
  • What is the cheapest way to take payments?
    The most cost-effective method varies based on your business. Some find flat-rate pricing convenient, while others benefit from interchange-plus pricing, where you pay the actual interchange fee plus a small markup. One option is to choose a card machine with a low upfront (non-monthly) price and transaction fees of less than 3.5%. For example, the SumUp card machine offers a low upfront cost for the device, and charges a flat fee of 1.69% per transaction for in-person payments, with no additional monthly fees or contracts. This makes it a cost-effective solution for businesses looking for a card machine with affordable transaction fees and minimal upfront expenses.
  • What is the average card transaction fee in the UK?
    The average card transaction fee in the UK hovers around 1.5-2.5%. However, rates can vary, and go up to around 3.5% in some cases, so it's wise to shop around for the best deal that suits your business.
  • Can I charge my customer the credit card processing fee?
    Since 2018, it has been illegal for businesses to impose surcharges for paying by debit card, credit card or electronic payment services. The UK Government took the decision to also include other payment methods such as PayPal in the ban to further protect consumers, which they believe “means no more nasty surprises for shoppers”.
  • Why do credit card machine providers charge processing fees?
    Credit card machine providers charge processing fees to cover the costs involved in handling transactions quickly. These fees encompass various expenses like maintaining secure networks, providing customer support, covering the risk of fraud, and complying with the regulations in the industry.
  • Why does my provider charge more than the average?
    If your current card processing provider charges more than the average transaction fee (1.5-3.5%) they are likely adding in markup fees for services like support and account setup. This is why it's important to compare how a provider's quote compares to the market to avoid hidden fees.
  • What is a monthly minimum fee?
    Think of the monthly minimum fee as a safety net for your provider. It's the minimum amount you're committed to paying each month for processing, regardless of your transaction volume. This fee ensures your provider can maintain services even during slower months.
  • How much do card machines cost?
    Card machines cost between £30 and £80 each, depending on the provider and whether you buy them new or second-hand. Some providers offer machines for free with a contract, while others may charge an upfront cost. Consider your business needs and the provider's terms to find the best fit.
  • Which card machine has the cheapest fees?
    Currently Worldpay's card machine comes with the cheapest transaction fees at an average of 0.75%-2.75% per transaction, but this is subject to change, so it's always best to keep an eye out and shop around for the best deals.
  • What should I do if I find a provider with cheaper fees than mine?
    Discovering a provider with lower fees can be exciting, but be sure to consider not just the fees the provider charges, but its overall value – including its reliability, customer service quality, additional features and perks, and any potential contract implications. Remember, the ``cheapest`` option might not always be the best fit, and you should always take the time to make an informed decision that aligns with your business goals. If the switch still seems promising after you've done your due diligence, negotiate or discuss it with your current provider; they might match the offer you've found to keep your business. If not, it's time to sign up with the new provider, and inform your previous provider. Make sure you're aware of any contract termination clauses or charges so there aren't any nasty surprises when you try to leave. is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews.

Written by:
Helena Young
Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.
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