Card Machine Fees Explained: The UK SME Guide for 2026

Card machine pricing is one of the most opaque costs a UK small business carries. A single advertised percentage hides at least three separate fees paid to three separate parties, and a row of fixed monthly charges sits underneath that are easy to miss at signing. This guide pulls the layers apart so you can read any UK card-machine quote and work out what you are actually going to pay.

We compare providers rather than process payments ourselves, so the figures below are drawn from public UK regulation, published rate cards and the structured rate data in our terminal database. Where a number is a regulated cap or a published statistic, it carries a source. Where it is a typical market range, we say so.

What are the three layers inside a card processing rate?

Every card transaction splits the merchant’s fee across three recipients.

• Interchange. Paid by your acquirer to the bank that issued the customer’s card. For UK domestic consumer cards this fee is capped by law at 0.2 percent on debit and 0.3 percent on credit under the retained UK Interchange Fee Regulation, overseen by the Payment Systems Regulator. Commercial cards, and cross-border transactions where the acquirer or issuer sits outside the UK, are not capped and cost more.
• Scheme fees. Paid to the card network, Visa or Mastercard, for running the rails. These are the least transparent layer. The Payment Systems Regulator’s market review into card scheme and processing fees found that these fees rose substantially and that merchants lacked clarity on what they were paying, which is why transparency remedies are now being introduced.
• Acquirer margin. What your provider keeps. This is the only layer your provider directly controls and the only one genuinely negotiable.

On a blended quote, all three are rolled into one percentage. On interchange-plus pricing they are billed separately, which is generally cheaper above roughly £25,000 of monthly card volume because you stop paying a blanket margin on the regulated interchange floor.

What is the difference between blended and interchange-plus pricing?

Blended pricing charges one flat percentage on every transaction regardless of card type. It is simple, predictable, and what most sub-£25,000-a-month SMEs are quoted. The trade-off is that you pay the same rate on a cheap debit card as on an expensive commercial credit card, so the provider’s margin on the debit transactions is large.

Interchange-plus pricing bills the regulated interchange, the scheme fee and a fixed transparent acquirer markup as separate lines. It is harder to read on a statement but cheaper at volume, because you only pay margin on the margin layer. The crossover point for most UK merchants sits around £25,000 to £50,000 of monthly card volume.

Which fixed fees sit outside the headline rate?

The percentage rate is only half the bill. Six recurring charges commonly sit alongside it.

Fee	Typical UK range	What it covers
PCI compliance fee	£4 to £19 a month	Administering Payment Card Industry Data Security Standard compliance
Statement or service fee	£2 to £10 a month	Account administration, most common on legacy acquirers
Minimum monthly service charge	£20 to £45 a month	A floor on what the acquirer earns from the account
Gateway fee	£15 to £45 a month plus 1p to 5p per transaction	Connecting an online checkout to the acquirer
Chargeback fee	£15 to £25 per dispute	Administering a disputed transaction
Settlement or withdrawal fee	50p to £1 per settlement	Paying your takings into your bank account

The Payment Card Industry Data Security Standard is maintained by the PCI Security Standards Council, which does not itself charge merchants; the monthly fee and any non-compliance surcharge are set by your acquirer. The ranges above are typical UK market figures, not regulated caps, and several modern providers waive the statement, withdrawal and minimum-monthly lines entirely.

How do the fees combine into an effective rate?

The effective rate is the only number that lets you compare two quotes fairly. It is total annual card cost, including every fixed fee, divided by total annual card volume.

Take a retailer doing £10,000 a month, £120,000 a year, on a 1.5 percent headline rate. The percentage cost is £1,800 a year. Add a £9 monthly PCI fee, a £6 monthly statement fee and four £20 chargebacks a year and the fixed charges add £260. The effective rate is £2,060 divided by £120,000, or 1.72 percent. The merchant signed for 1.5 percent and pays 1.72 percent, every year the contract runs.

This is why a provider with a higher headline rate and no fixed fees can be cheaper than a provider advertising a low rate stacked with monthly charges. Always compare on effective rate.

Do the contactless and Tap to Pay limits affect what I pay?

Not directly on price, but they shape which transactions clear without friction. The UK contactless limit has been £100 per single in-person tap since 15 October 2021, when UK Finance coordinated the rise from £45. Transactions above £100 need a PIN or a biometric digital-wallet authentication. The processing fee itself does not change with the contactless limit; what changes is how many of your sales pass as a quick tap versus needing the keypad, which matters for queue speed rather than cost.

How do I reduce my card machine fees?

Four levers move the bill in practice.

1. Negotiate the margin layer. Interchange and scheme fees are fixed by regulation and the networks; only the acquirer margin is yours to push. Above roughly £15,000 of monthly card volume, providers expect to negotiate.
2. Switch to interchange-plus at volume. Above £25,000 a month, the transparency usually pays for itself.
3. Strip the fixed fees. Ask any provider to remove or waive the statement, minimum-monthly and withdrawal lines. Many will for a multi-year commitment.
4. Review at renewal. Rates signed three years ago are rarely competitive today. We cover the timing in detail in our guide to when to switch your card machine acquirer, and the hidden fees on free card machines piece sets out exactly what to get in writing first.

Sources

• Payment Systems Regulator, the Interchange Fee Regulation and the market review into card scheme and processing fees.
• UK Finance, contactless limit increase to £100 from 15 October 2021.
• PCI Security Standards Council, on the administration of PCI DSS compliance.
• Published UK provider rate cards and the structured rate data in our internal terminal database.