Hidden Fees on Free Card Machines: What to Check Before Signing

A free card machine in the UK is almost never genuinely free. The hardware is subsidised by the acquirer because the recurring rate, monthly fees and ancillary charges are profitable enough across a typical contract term to cover the device cost three or four times over.

There is nothing wrong with that model, but it does mean a merchant who optimises only on the headline percentage rate is rarely optimising on total cost. The six fee categories below are where the real money sits.

1. PCI compliance fee

Every UK card-accepting business must be compliant with the Payment Card Industry Data Security Standard (PCI DSS). The PCI Security Standards Council, which maintains the standard, does not itself charge merchants; compliance is administered by your acquirer.

Acquirers commonly charge a monthly PCI fee, typically £4 to £19, and a non-compliance surcharge if you fail to complete the annual self-assessment questionnaire on time. The non-compliance surcharge sits at £20 to £45 per month and continues until the merchant completes the questionnaire. Some acquirers bundle PCI fees into the headline rate; others bill them as a separate line on the monthly statement.

Check: is the PCI fee included or separate? What is the non-compliance surcharge? Is there a guided portal for completing the questionnaire, or are you expected to do it unaided?

2. Statement or service fee

A small recurring fee, typically £2 to £10 a month, for the production of merchant statements and the running of the account. Statement fees are most common on legacy acquirers (Worldpay, Barclaycard, Elavon) and rare on newer providers (Dojo, SumUp, Square, Stripe, Zettle).

The fee is small but persistent and rarely volume-related. At £8 a month it is £96 a year out of a business that may only do £20,000 to £40,000 of card volume.

Check: is there a flat monthly account fee, separate from the per-transaction rate? Is it called a statement fee, service fee, account fee or admin fee?

3. Minimum monthly service charge

A floor on what the acquirer will earn from the account in any given month. If your transaction-rate billings come in below the floor, the acquirer charges the difference.

Typical floor: £20 to £45 a month for a standard SME card account. At a 1.5% blended rate, a £20 monthly minimum implies card volume of £1,333 a month; anything below that and the minimum bites. Seasonal businesses (ice-cream vans, Christmas markets, summer festivals) feel this most.

Check: is there a minimum monthly service charge? What is it? When did the acquirer set the floor and is it negotiable?

4. Gateway fee (for online and omnichannel)

For online or omnichannel card payments, you need a payment gateway to sit between your checkout and the acquirer. Some acquirers run their own gateway (Stripe, Adyen, Worldpay, Square); others require you to plug in a third-party gateway (Opayo, Trust Payments, Checkout.com, Cybersource).

Gateway fees: typically £15 to £45 a month for an SME plan, plus a per-transaction gateway charge of 1p to 5p on top of the acquirer’s percentage rate. Some bundled offers cover the gateway in the rate; others bill it separately.

Check: who is the gateway? Is it included in the rate? What is the per-transaction gateway fee? Is there a monthly gateway minimum?

5. Chargeback fee

When a customer disputes a card transaction with their bank, the merchant is liable for the disputed amount and is charged an administration fee for the dispute, regardless of who eventually wins.

Typical UK chargeback fee: £15 to £25 per dispute. Some acquirers waive the fee if you successfully defend the chargeback; most do not. A merchant in a higher-chargeback category (subscription, ticketing, ecommerce of any complex returns category) can see chargeback fees become a material line on the bill.

Check: what is the per-chargeback admin fee? Is it refunded if you win? Does the acquirer provide a chargeback drafting service, or are you on your own?

6. Withdrawal or settlement fee

A fee for the acquirer paying the money you have earned into your bank account. Most modern UK acquirers do not charge this, but a meaningful minority do, particularly on lower-tier or pay-as-you-go plans.

Typical withdrawal fee: 50p to £1 per settlement, with daily withdrawals running £15 to £30 a month if you take settlement every working day. Some providers (notably some Stripe plans for new merchants) hold a rolling reserve, where a percentage of card volume is held back for 7 to 30 days as a fraud-risk buffer.

Check: are there fees on settlement transfers? What is the standard settlement timing? Is there a reserve, and what percentage and duration?

How the six fees compound

Take a UK retailer doing £10,000 a month in card volume on a “free” terminal at a 1.5% headline rate. The headline cost is £150 a month, £1,800 a year.

Add: PCI fee £9 a month (£108 a year), statement fee £6 a month (£72), minimum monthly that does not bite at this volume (£0), no gateway because in-person only (£0), one chargeback a quarter at £20 (£80 a year), no withdrawal fee (£0). Total ancillary cost: £260 a year, or roughly 0.26 of a percentage point on top of the headline rate.

The merchant signed for 1.5%. The effective rate is 1.76%. On £10,000 monthly card volume that is £312 a year of difference, every year the contract runs.

Practical pre-signing checklist

Before signing any UK card-machine contract, get the following six lines in writing.

1. PCI compliance fee per month and non-compliance surcharge.
2. Any statement, service, account or admin fee per month.
3. Any minimum monthly service charge.
4. Gateway fee per month and per transaction if online or omnichannel.
5. Chargeback admin fee per dispute and whether it is refunded on successful defence.
6. Settlement, withdrawal or reserve terms.

If any of the six are unclear or absent from your written offer, ask for them in writing before you sign. A provider unwilling to put a number on those six is a provider whose total cost is going to surprise you.