Credit Card Processing Fees & Rates for UK Merchants 2024

Credit card fees eat into your firm's profits – but how much do they actually cost, and can you avoid paying them? Find out in our full credit card transaction fees cost breakdown.

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 is reader supported – we may earn a commission from our recommendations, at no extra cost to you and without impacting our editorial impartiality.

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 are also 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, you can use our 🔍free comparison tool to compare tailored quotes from top payment providers. Each charges different fees, for example:

RANKED: Our top credit card processing providers, plus their transaction fees

  1. WorldPay – Transaction fees: 2.75% + £0.20
  2. Square – Transaction fees: 1.75% 
  3. Zettle by PayPal – Transaction fees: 1.75%
  4. SumUp – Transaction fees: 1.69% 
  5. Smartpay Anywhere – Transaction fees: 1.6%
  6. takepayments – Transaction fees: range from 0.3% to 2.5%

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

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 will also factor into how much your fees cost.

For example, if you’re running an ecommerce website, Square offers the cheapest online transaction fees. But, for brick and mortar businesses, Barclaycard’s Smartpay Anywhere comes with the cheapest flat rate for CHIP and contactless payments.

This expert guide will explain what credit card processing fees include, how much they typically cost, and more.

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.

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:

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.

What factors impact credit card processing costs?

The Sumup card reader at Jerry's, London

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:

Swipe right to see more
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Worldpay Reader

Square Reader

Zettle by PayPal


Smartpay Anywhere (by Barclaycard)

takepayments A920

Transaction fees
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%

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

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.).

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

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.

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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.
  • 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.
  • 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.
  • 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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