Payments
UK card processing fees explained: the charges behind your bill
Interchange, scheme fees and your provider’s charges make up different parts of a payment bill. Learn what each means and how equipment and recurring fees affect the total you pay.
Written by Jessica Gardner, In-house Editor, Reeve Consult · 2 min read
Updated
What makes up a UK card processing bill?
Transaction pricing covers costs associated with accepting a payment, including interchange, card scheme charges and the provider’s service. The agreement may also include per-transaction, equipment, account or other charges. Providers can bundle these into a quoted rate or itemise them. Your overall cost therefore depends on the pricing model, transaction count, card mix and fixed fees, not just one advertised percentage.
- Domestic interchange caps apply to specified consumer cards, not every card or the whole merchant fee.
- A per-transaction charge has a greater effect on a small purchase than on a large one.
- The January 2026 court ruling concerned PSR powers. It did not itself enact a new cross-border interchange cap.
A provider's advertised percentage and the total on a monthly bill can measure different things. Understanding the components helps you ask why the difference exists and compare proposals fairly.
What are the transaction cost components?
Interchange is a fee between the acquiring side and the card issuer. Card schemes also charge for their services, and the payment provider prices its own processing and service. A proposal can bundle those costs or itemise them.
The UK interchange caps for qualifying domestic consumer cards do not cap the complete bill. Commercial cards and cross-border transactions need separate treatment. Your card mix therefore matters as well as turnover.
How do pricing models differ?
Blended pricing combines relevant transaction costs into quoted rates, which may still differ by card or channel. Interchange-plus pricing passes through defined costs and adds the provider's agreed charge. Neither label tells you the whole price without the fee schedule.
Some contracts include a per-transaction amount. Equipment, account services and event-related charges may be separate. Ask which items the quoted percentage actually includes.
Use your own payment activity to compare transaction charges, terminal costs, contract terms and payout schedules.
How can you calculate an overall cost?
Use the complete fees and card takings for the same period. Dividing fees by takings and multiplying by 100 gives an overall percentage for that activity. Explain what is included so another person can reproduce it.
For an illustrative month with £10,000 in takings and £120 in complete fees, the overall percentage is 1.2%. That does not mean the contractual transaction rate is 1.2%; fixed and per-transaction charges may contribute to the total.
What changed in the January 2026 court ruling?
The PSR's account of the ruling concerns its power to regulate cross-border interchange. The ruling did not itself introduce a new 0.2% or 0.3% cross-border cap. It should not be used to promise that a merchant's next statement will fall by a particular amount.
Check your current contract, compare a written quote and plan the handover before cancelling your existing service.
What should a comparison include?
Price the same turnover, transaction count, card mix and channels. Include equipment and recurring charges, then compare payout, support and contract terms. A rate from a different business is not a reliable benchmark without those details.
Reeve Consult can review a statement and discuss a written DOJO proposal. The comparison should show which charges would change and what the proposed setup supports, with any offer conditions stated before you decide.
Frequently asked questions
Straight answers
Does the interchange cap limit the whole merchant bill?
Did the January 2026 court ruling introduce a new cross-border cap?
Next step
Which part of your payment setup would you like to improve?
Tell us where customers pay, which till you use and which charges you want explained. We can discuss the options and arrange a statement review.
Request a payment reviewJessica Gardner is the in-house editor at Reeve Consult. She writes and edits every guide, blog post, and resource published on the site, making sure the writing is plain-English, the facts check out, and the advice is genuinely useful for the UK independent business owners we work with.