UK card-terminal fee structures explained

The four main UK pricing models

Flat rate: one number for every transaction (1.69% SumUp, 1.75% Square, 1.5% + 5p Tide, rising to 1.6% + 5p on 1 December 2026). Simple, predictable, fair to small operators, expensive at high volume. Blended rate: one number that bundles interchange, scheme fees and the acquirer margin (Dojo publishes 1.2% blended below £100,000 a year; bespoke Tyl).

Cheaper than flat at higher volumes. Interchange-plus (IC++): the underlying interchange + scheme fees passed through directly, plus the acquirer margin separately (Adyen, some Stripe deals, Worldpay enterprise). Most transparent at high volume. Tiered: a "qualified" headline rate applies to standard cards but premium and corporate cards downgrade to "mid-qualified" or "non-qualified" tiers at much higher rates.

Some legacy contracts, including some older Worldpay ones, use this. It can cost much more than the headline rate suggests.

Why the same headline number means different things

A blended rate such as Dojo's published 1.2% blended (below £100,000 a year) applies to every card transaction. On an illustrative legacy tiered contract, a 1.5% qualified rate can be 1.5% for some transactions, 2.5% for premium-tier card transactions, and 3% for corporate-card transactions.

The actual cost depends on your transaction mix. If you take a lot of business-to-business cards (corporate cards), tiered pricing is much more expensive than the headline suggests. Always ask: "is this rate the all-in cost, or is there a downgrade structure I should see?"

Interchange and scheme fees, the underlying cost

Every UK card transaction has an underlying cost the acquirer pays to the card scheme (Visa, Mastercard, Amex). Interchange is paid to the issuing bank; scheme fees are paid to Visa or Mastercard. UK consumer debit interchange is capped at 0.2% and consumer credit at 0.3%, plus scheme fees.

Commercial (corporate) cards are not capped and cost more, and international cards (US-issued, EU-issued) run higher again. Interchange-plus pricing exposes this; blended and flat-rate pricing absorb it into the headline. The acquirer's margin sits on top.

Monthly platform fees and the small-print costs

Headline transaction rate is rarely the whole picture. Watch for: monthly platform fee (on some contract products; £0 for SumUp, Square and Zettle), PCI compliance fee (a monthly charge on some contracts), authorisation fee (a per-transaction charge on top of the rate), statement fee, chargeback fee (Stripe UK, for example: £20 per dispute received, plus £20 to respond, which comes back if you win), early-termination fee, and minimum monthly transaction fee (you pay it even if you do not trade). Total cost of acceptance is rate × volume + monthly fees + ad-hoc fees; not just the rate.

Fixed fees that sit outside the headline rate

Contracts that charge them can include: a monthly PCI compliance fee; a statement or service fee; a minimum monthly service charge; a gateway fee a month and per transaction for online checkouts; a chargeback fee set by your provider (Stripe UK: £20 per dispute received); and a settlement or withdrawal fee. Amounts vary by contract, so get each one in writing. As an illustration, on a £10,000 a month retailer at 1.5%, a £9 PCI fee, a £6 statement fee and four £20 chargebacks a year add £260 to the £1,800 percentage cost, so the effective rate is about 1.72%, not 1.5%.

Six lines to get in writing before you sign

Ask for each of these in the written offer: (1) the PCI compliance fee and any non-compliance surcharge; (2) any statement, service, account or admin fee; (3) any minimum monthly service charge; (4) the gateway fee per month and per transaction if you sell online; (5) the chargeback fee per dispute and whether it is refunded when you win; (6) settlement, withdrawal and reserve terms. A provider that will not put a number on all six is likely to cost more than its headline rate suggests.

Worked example: £15k monthly volume

A blended quote of 1.5% (Dojo quotes a custom rate at this volume, which is above £100,000 a year): £15,000 × 1.5% × 12 = £2,700 / year. Assuming no platform fee, total: £2,700. SumUp Solo flat 1.69%: £15,000 × 1.69% × 12 = £3,042 / year. Plus £0 platform fee.

Total: £3,042. An illustrative tiered contract at 1.5% qualified, 2.5% premium, 3% corporate (assuming 70% qualified, 20% premium, 10% corporate mix): blended effective rate ~1.85%. £15,000 × 1.85% × 12 = £3,330. Plus £25/month platform = £3,630. In this illustration the tiered headline of 1.5% costs more than the SumUp flat 1.69%. Tiered pricing is the trap.

When each model wins

Flat rate (SumUp, Square, Zettle, Tide): wins at lower volumes, until a contract rate covers its monthly fee (Dojo against SumUp: about £5,100 a month). Predictable, no contract, no surprises. Blended (Dojo, Tyl): wins from there; above £100,000 a year in card takings Dojo quotes its rate per merchant.

Better all-in cost than flat at scale, simpler than IC++. Interchange-plus (Adyen, enterprise Stripe): tends to win at high volume, especially with few premium cards, and shows each cost line by line. Tiered (some legacy contracts): if you have a tiered contract, run the comparison and consider switching.