Guide · Card processing fees explained
How to read your merchant statement (and spot what you're overpaying).
Card processing fees explained the way no acquirer will explain them: line by line, with what each one should roughly be.
The bills are climbing. UK businesses are paying at least £170 million a year more in scheme fees alone since 2017. Here's how to read your own statement and find the lines that are quietly costing you.
Last reviewed: 7 June 2026
Your merchant statement has roughly seven moving parts. Three of them are set in law or by the card schemes, and one of them, the acquirer markup, is where most overpayment hides.
Here's the uncomfortable bit. The UK Payment Systems Regulator found that Mastercard and Visa raised their core scheme and processing fees to acquirers by at least 25% since 2017, costing UK businesses at least £170 million extra a year (PSR, Market review of card scheme and processing fees, final report, 6 March 2025).
I've spent 40 years in hospitality, a lot of it watching publicans sign card deals they never properly read. So let's read one together. By the end you'll know what each line is, who it goes to, what it should roughly be, and the red flag that tells you you're being clipped.
Merchant statement explained
Every fee is one of three things, then a pile of extras.
Strip the jargon away and a card fee is interchange, scheme fees, and the acquirer markup. Interchange goes to the bank that issued your customer's card. Scheme fees go to Visa and Mastercard. The markup is what your provider keeps.
Then come the extras. Authorisation fees. PCI charges. A minimum monthly service charge. Terminal rental. None of those are the deal itself, but they're where a fair-looking rate turns expensive.
Worth saying plainly: a provider that sells you the card machine can't really tell you the markup is too high, because the markup is theirs. I don't sell you one acquirer over another, so I can.
Line 1
Interchange: the bit that's capped.
What it is: a fee paid to the bank that issued your customer's card. Who it goes to: the card issuer, not your provider. What it should be: UK domestic interchange is legally capped at 0.2% for consumer debit cards and 0.3% for consumer credit cards under the UK's retained Interchange Fee Regulation (iwoca, Interchange fees explained).
Those caps only apply to UK-issued consumer cards on UK transactions. That's exactly why a tourist's American Express, a company purchasing card, or an international card costs you more. There's no cap on those, so the fee climbs.
Red flag: if your statement bundles everything into one flat rate, interchange isn't passed through at the capped 0.2% it should be. You're paying the same on a debit tap as on a premium reward card. That's a margin grab dressed up as simplicity.
Line 2
Scheme fees: the line that keeps rising.
What it is: assessment and processing fees charged by Visa and Mastercard. Who it goes to: the card schemes themselves. What it should be: small per transaction, often a fraction of a percent, but it's the line the regulator says has run away.
This is the 25%-plus increase since 2017, the one driving that £170 million-a-year figure. There's also the cross-border story: the PSR estimates UK businesses paid an extra £150 to £200 million in a single year after Visa and Mastercard raised cross-border interchange fivefold, from 0.2% to 1.15% on debit and 0.3% to 1.5% on credit, with the regulator noting businesses had "little choice but to pay the increased costs" (PSR, cross-border interchange proposal).
Red flag: scheme fees you can't see at all. On interchange-plus pricing they should be itemised. If they're invisible, they've been folded into a markup you're not allowed to question.
Line 3 · The negotiable one
Acquirer markup: where the overcharging hides.
What it is: your provider's own cut on top of interchange and scheme fees. Who it goes to: the acquirer, the company whose name is on your contract. What it should be: a small, agreed margin. On interchange-plus deals, a fair markup is often a fraction of a percent plus a few pence per transaction.
Here's the thing the schemes' price rises actually tell us. Interchange has been capped since 2015 and the average cost of a UK card transaction still rose from £0.055 in 2016 to almost £0.085 in 2022 (Merchant Savvy). If the capped part held steady and the total went up, the rise lives in the uncapped lines: scheme fees and markup. That's where to look.
Red flag: a markup you can't see, or a "tiered" rate (qualified, mid-qualified, non-qualified) that quietly pushes most of your transactions into the dearest tier. Tiered pricing exists to blur the markup. Ask for interchange-plus and watch how the conversation changes.
Lines 4 to 7
The smaller lines that add up fast.
None of these is the headline rate. Together, on a quiet month, they can cost more than the transactions do. Here's what each one is and where the trick usually sits.
Authorisation fees
A few pence charged every time a payment is authorised, win or lose. Should be: a small, flat per-auth figure, often a penny or two. Red flag: auth fees charged on declines, or stacked on top of an already-high per-transaction rate.
PCI compliance
A charge for keeping your card data handling compliant. Should be: a modest monthly or annual fee, and often included. Red flag: a PCI non-compliance fee that lands because nobody told you to fill in a form. That one's pure penalty, and it's avoidable.
Minimum monthly service charge
A floor on what you pay, even if you take almost nothing. Should be: low or none for a small business. Red flag: a high minimum that punishes a seasonal pub or a quiet January. If your takings dip and the bill doesn't, this is why.
Terminal rental
What you pay to rent the card machine itself. Should be: a sensible monthly figure for the kit you actually use. Red flag: a long, locked-in lease at a price well above buying the terminal outright, often the most overpriced line on the page.
Stuck on the markup?
Send me your latest statement and I'll tell you, free and with no obligation, exactly which lines are fair and which you're overpaying on.
That's the whole point of the free review of your card processing fees. I'm an independent advisor, not tied to one acquirer, so I've no reason to talk up one deal over another. I just read the bill the way I'd read my own.
Send Andy your statement
Who can review my card processing fees?
An independent advisor. Not the company that sold you the deal.
The short answer: an independent payments advisor who isn't tied to one acquirer will read your statement for free and tell you, line by line, which fees are fair and which you're overpaying on. Your current provider won't, because the markup that's costing you is the markup that pays them.
That's what I do. I'm Andy Miller, 40 years in hospitality, ex-Punch Taverns and Whitbread, working across roughly 9,000 pubs over the years, now an independent payments advisor based at 4 Theaks Mews in Taunton. I make my money the same whether or not you switch, which is exactly why I can be straight with you.
[ANDY TO CONFIRM: a real, anonymised example, e.g. "Last month I read a statement for a pub near Bridgwater and found £___ a month in non-compliance and inflated terminal rental."]
How to read your merchant statement (UK)
Five minutes with a highlighter.
Pull out your last statement, grab a pen, and run down this list. You don't need to be an accountant. You just need to know what each line is supposed to be.
The checklist
- Find your interchange. Is consumer debit near 0.2%?
- Find the scheme fees. Are they itemised at all?
- Find the markup. Can you even see it?
- Check for auth fees on declined payments.
- Look for a PCI non-compliance charge.
- Check the minimum monthly service charge.
- Check what you pay to rent the terminal.
Common questions
Card processing fees, answered straight.
For a small UK business taking cards in person, an all-in blended rate of roughly 0.6% to 1.75% per transaction is common, depending on your card mix and your acquirer's markup. UK domestic consumer debit interchange is capped at 0.2% and consumer credit at 0.3%, so a fair total sits not far above that for debit-heavy businesses. If you're routinely seeing 2.5% or more on standard UK consumer cards, the markup or scheme fees are likely where you're overpaying.
A flat 3% is usually a sign of a bundled or flat-rate plan that hides the cheap stuff (capped debit interchange) inside an expensive average. Move to interchange-plus pricing so you only pay the capped interchange, the scheme fee, and a small agreed markup. Strip out padded extras like PCI non-compliance charges and inflated terminal rental. Then benchmark the acquirer markup, because that's the negotiable line where 3% deals tend to live.
Charging your customer a 4% surcharge on a UK consumer debit or credit card is not legal. Since January 2018 it's been against the law to surcharge consumers for paying by most cards in the UK. A provider can charge your business whatever the contract says, but you can't pass a 4% card fee straight on to a consumer. Commercial and corporate cards are treated differently and can be surcharged within the actual cost of acceptance.
A UK card processing fee is made up of three parts plus extras. Interchange goes to the card-issuing bank and is capped at 0.2% for consumer debit and 0.3% for consumer credit on UK transactions. Scheme fees go to Visa and Mastercard. The acquirer markup is your provider's cut and is the negotiable bit. On top you may see authorisation fees, PCI compliance charges, a minimum monthly service charge, and terminal rental.
The average cost of a UK card transaction rose from about £0.055 in 2016 to almost £0.085 in 2022, according to Merchant Savvy. Expressed as a percentage, a typical small business pays a blended rate somewhere between 0.6% and 1.75% in person, higher online and higher again on commercial or international cards. Averages hide a lot, though, which is why reading your own statement beats any headline number.
For standard UK consumer cards taken in person, yes, 3% is high. With consumer debit interchange capped at 0.2% and credit at 0.3%, a 3% blended rate means the scheme fees, the acquirer markup, or both are well above what a competitive deal looks like. There are situations where 3% is defensible, such as a business taking mostly international or premium reward cards online, but for a typical UK pub or shop it usually signals overpayment.
Not on UK consumer cards. The 2018 surcharge ban stops you adding a card fee to a consumer paying by debit or credit card. You can build the cost into your prices, and you can surcharge commercial or corporate cards up to the genuine cost of accepting them. Tipping or service-charge models don't change the rule. If a provider tells you that you can simply pass everything on to customers, treat that as a red flag.
The bottom line
Read the bill, not the brochure.
The schemes have pushed their fees up while the capped lines held steady. So the money you're losing is sitting in the lines nobody points out. Find them, and you've already won half the argument.
Let me read your statement.
Send me your latest merchant statement and I'll tell you, free and with no obligation, exactly which lines are fair and which you're overpaying on.
No sales pitch. No contract to sign.