Credit Card Processing Fees & Rates 2024 – with Calculator

Taking card payments isn’t simply a matter of choosing the best card machine. Any small business that accepts card payments also has to contend with credit card processing fees.

You can expect to pay anything from 1.5% to 3.5% with each payment, depending on the credit card your customer uses. There can also be authorisation fees that cost around 1p to 3p per sale, and merchant service fees of 0.25% to 0.35%.

It’s important to understand the exact rates you’ll be charged each time you take a card payment. To help with this, we’ve built a handy custom card processing fees calculator for merchants, below.

How much revenue does your business make in a typical month?

How many transactions per month do you estimate you process?

In the grip of a cost of living crisis, saving even the slightest amount on recurring fees can benefit you in the long run. As well as the card payment provider you choose, the type of business you run  and the type of plan your choose will also factor into how much your fees cost.

For example, WorldPay’s pay as you go fees are a relatively high 2.75% + 20p per transaction for credit card transactions. But, this drops to as little 0.75% for debit cards on WorldPay’s pay monthly plan. For brick and mortar businesses, Tide comes with the cheapest flat rate for CHIP and contactless payments, though takepayments’ bespoke fees can drop as low as 0.3% on certain custom plans.

This expert guide will explain what credit card processing fees include, how much they typically cost, and more. To get you started, we’ve rounded up our top recommended card processing providers and their fees, below:

What are credit card processing fees?

We observed the Zettle card reader in action at Shrubs And Dubs, a shop in Shoreditch, London

Credit card processing fees are the charges paid by business owners every time they collect a card payment from customers. These fees are charged by the payment provider, and they can vary massively depending on the type of payment made, the type of card uses, and the payment processor’s pricing model.

How much do card processing fees cost?

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.

Remember, the exact fees you’ll spend can vary immensely, depending on the types of transactions you’re processing, and how many.

For instance, some providers charge different fees depending on the plan level you sign up to; or depending on the type of payment being processed. Credit card transactions may have different charges to debit cards, for instance. With Square devices, there’s even a different fee for a simple contactless payment, vs a payment where a chip and pin code is entered.

Some providers charge a ‘per transaction’ amount, on top of a fee. WorldPay’s pay as you go rate is one example; there’s a standard 2.75% fee, plus 5p per transaction. This would potentially mount up costs for a business that sells a large quantity of small cost items, such as a coffee stall.

Additionally, with some providers you need to pay a monthly fee to rent the card reader; others charge you a one-off cost, up-front, per piece of card reader hardware.

What credit card processing fees do I have to pay?

The UK is becoming a 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:

What factors impact credit card processing costs?

We examined the SumUp card reader at Jerry’s, a food and drink stall in Angel, 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?

Transaction fees

Transaction fees cost between 1.5-3.5% depending on the type of card used (debit card fees are less than credit) and the payment method (in-person payments charge less than online banking). Merchants can also minimise transaction fees by researching providers with cheaper overall fees.

For example, Square charges 1.75% for debit card payments, while Barclaycard Smartpay Anywhere charges 0.3%. However, the latter has higher monthly fees, making Square cheaper overall. Here’s what other top providers charge in transaction fees:

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FEATURED PROVIDER	BEST OVERALL
Tide Card Reader Plus	Barclaycard Smartpay Touch	Zettle Reader 2	Tide Card Reader Plus	Clover Flex	Smartpay Anywhere (by Barclaycard)	takepaymentsplus
Transaction fees 1.5% for all payments	Transaction fees 2.75% + 0.20p for pay-as-you-go 0.75% for debit cards or 2.75% for pay monthly	Transaction fees 1.75% for all contactless or card payments	Transaction fees 1.75% for all contactless or card payments	Transaction fees 1.69% for all contactless or card payments	Transaction fees 1.6% for credit card payments 0.3% for debit card payments	Transaction fees Personalised per business – range between 0.3% to 2.5%

Use our comparison tool to find the best credit card processing fees for your business Compare Costs

Amex fees

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% more in your credit card transaction charges. That’s why many small business choose not to accept Amex.

Merchant account fees

Merchant accounts are a type of business bank account which you need to be able to take card payments. Many charge fees of around £5 to £15 a month. Some (such as Square) have no monthly fees which could keep costs lower for SMEs. But their transaction fees are higher. It’s important to consider how higher merchant account fees might lead to lower overall card fees long-term.

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.

Merchant service charges

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%.

Card machine costs

Card machine costs range from £19.20 (for the 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.

Pay-as-you-go card readers

Card readers can range from around £20 to £100 or more if you pay upfront. This style of payment is ideal for small or microbusinesses that won’t need more than one reader. It offers long-term cost savings by eliminating recurring monthly fees.

Pay monthly card readers

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 more certain cash flow, and allows you to invest in more card readers long-term by spreading the cost.

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

Here are some examples of card reader fees:

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

We tested out the Square terminal, which costs £114 + VAT, at Got That Crystal Healing, a shop in Shoreditch, London

Card payment methods

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, for transaction fees, Square charges 1.25% more for cardless payments (those made over the web).

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. Most businesses will easily make this amount, so it’s really only a concern if you’re not selling consistently, such as a market trader.

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, but the exact amount depends on the provider, card type, and transaction volume (high-volume businesses may be able to negotiate lower fees.).

PCI compliance fees

PCI compliance is a countrywide fraud prevention method that costs between £2.50 and £5 per month. The charge is 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 by avoiding paying PCI compliance fees.

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.

Hidden card processing 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

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.