Credit Card Processing Fees

Thousands of businesses up and down the country take credit card and debit card transactions - whether that’s via card machine or online.

However, in order to facilitate card transactions most of these businesses are required to pay card processing fees as part of the set-up and day-to-day management of their payment solutions.

This typically isn’t limited to one standalone fee.

In fact, there are a variety of different fees and charges that might crop up when it comes to card payments. We’re going to explore each one in detail - so if you’re in the process of looking to accept card payments across your own business, it’s well worth keeping the following in mind…

What are credit card merchant fees?


Credit card merchant fees are the various charges that are paid out in order to accept card payments.


It depends on the types of card payments your business deals with, but you’ll normally find that credit card merchant fees are charged for each individual transaction - while there are also fees for renting the card machines to actually accept payments with.

There are a range of different (and often unexpected) fees and charges associated with credit card processing. Again, you might find that some are more relevant to your business than others - but let’s run through them all just be clear.

Card processing fees explained

Card payment method

The type of card processing charges you’ll encounter is almost entirely dictated by the card payment options you decide to use.

However, before you start exploring the different card payment methods - it’s important to gain a basic understanding of how to start taking card payments across your business.

In doing so, you’ll see that the types of fees you might encounter can be split into two categories:





Card payment being held

Monthly fees showing circular arrows

Monthly fees
Card terminals are normally provided on an ongoing monthly rental basis - they’re not ‘owned’ by your business. Then, there are other potential monthly fees to consider, such as a minimum monthly service charge (MMSC), which is essentially the minimum charge for not meeting the number of monthly transactions agreed between you and your provider.

One off Fees shown with 1 and Pound Sign

One off fees
One of the most common examples of a one off fee would be the charge that some providers might require in order for you to obtain PCI DSS compliance status. With most providers, there is also a single, standalone fee for set-up - while each and every transaction processed will also have its own one off fee charged on top. These are often called ‘transaction fees’ or ‘merchant services fees’.

These are some of the most common monthly and one off fees that you’re likely to encounter. However, there are a variety of other fees that could crop up - and you’ll find these listed in our comprehensive card payments guide.

As far as the different payment methods are concerned - each method is likely to have it’s own fees and charges to consider…

Card Machine and payment card

Card machine
As explained above, hiring the card machine terminals used across your business is like renting a piece of equipment in most circumstances. This will normally consist of a monthly rental charge - and the card machine cost will vary from provider to provider.

Cloud with shopping trolley to show Virtual Terminal

Virtual terminal
As the name suggests, you don’t physically hire a virtual terminal in the way that you would pay a monthly rental to keep hold of card machines. All you need is a laptop or tablet with an internet connection. As a result, you’ll probably encounter similar fees to those you’d find with payment gateway solutions.

Payment Gateway

Payment gateway
Perhaps your business doesn’t rely on card machines to facilitate card payments? Online businesses with payment gateway solutions might also find themselves subject to various fees and charges for transactions, authorisation and compliance - on top of any merchant fees to the provider. With most providers, every payment gateway solution comes with a virtual terminal - so you’d need to consider the fees and charges associated with both.

Merchant Service Charges

For every transaction made across any credit card payment solution there is a fee... This is a combination of various charges, which can be seen below.

Credit / Debit card charges

A small percentage of each transaction taken as fees - and this varies depending on the type of card. For consumer cards this can be as low as 0.35% and for some
commercial cards this can be as high as 2.29%.

Minimum Monthly Service Charge

This fee only applies if your transactions fall below a certain benchmarked level agreed by your provider. Essentially, if your other fees exceed this level, you won’t need to
pay a minimum monthly service charge (MMSC).

Authorisation fees

Authorisation fees are usually a flat fee as opposed to a percentage of the transaction. They are exactly as the name suggests - a fee that’s charged by the processing
provider to actually authorise the payment.
This is usually between 1-4p per transaction - although some providers don’t charge a penny for authorisation.

Premium card charges

In some cases, processing payments from premium credit cards (like American Express cards, for instance) might be more expensive.
Transaction fees are often higher for premium card transactions - so this is definitely one to bear in mind if you want to process these types of payments across your

CNP fees

When it comes to card not present (CNP) transactions, many providers are likely to have heightened security measures in place as a means to prevent fraud.
As a result, you might find that these transactions carry additional fees to cover the cost of certain security features.

Statement & reporting charges

Some providers may include a fee for providing you with your credit card processing statement at the end of each month.

PCI compliance fee

Again, this is another monthly administrative fee for the completion of your PCI Self Certification Questionnaire and compliance certificate. It’s a necessary outgoing to
ensure that your business remains a reliable, trustworthy and compliant merchant who can be trusted to take card payments safely and securely.

Early termination fees

As with most agreements where a contract is in place between the customer and the supplier, an early termination fee applies should you decide to cancel ahead of time.
Again, this will vary from provider to provider.

Set-up fees

The cost of setting up the solution. This is normally a one-off upfront fee charged by some providers. Everything from manual card machine installation to setting up your
merchant account would be absorbed into this overall cost.

Chargeback fees

Card issuers generally have a chargeback mechanism in place to enable them to reclaim money from the merchant’s bank if required (i.e. refunds). Therefore, this is an
administrative fee that is only charged on case-by-case basis - it’s not charged for every transaction.

Swapout fees

If your terminal breaks, some suppliers insist that an engineer visits you to fix it, which incurs a charge. Others will send you a replacement terminal, which you can install
yourself for free.

Is it legal to charge for using a credit card in the UK?

As of January 2018, it is officially unlawful for merchants to charge an additional fee for consumers paying with a credit or debit card. Before then, many retailers added a ‘surcharge’ on certain credit card payments - but this is no longer the case.

Merchants now have two options - absorb the cost, or increase their prices.

See the government’s guidelines on the matter for further guidance on credit card charges.

Two open Laptop screens showing two people looking at a paper

Apples where one is blue in colour

Comparing merchant services


If you’re in the market for merchant services, it’s probably best to weigh up the potential fees attached to each type of service before making your decision.

Comparing processing charges is a good way to balance the spread of features you can use versus what you’ll end up paying in fees.

question and answer

Tips to find the best merchant account for your business

When comparing merchant accounts, there are few things you’ll need to know in order to get the best deal for your business.

Do the maths

From basic things like turnover, to the actual volume of card transactions you take (or you forecast to take in the future). This will enable you to get the most accurate quotes possible from different providers.

Shop around

As mentioned above, it’s best to check ‘what’s on the menu’ before you sit down to eat, so to speak.
Check what each provider has to offer and get a thorough understanding of what processing fees you’re likely to be charged before signing on the dotted line.

Don’t be afraid to negotiate

At the end of the day, it’s in the provider’s interests to listen to your needs and take on board any concerns you might have. Feel free to negotiate on price and open up a two-way conversation in order to get a fair deal that works best for your business needs.

Find out more about credit card processing fees

If you’re curious about opening a merchant account or switching - and want to learn more about the different credit card processing fees, we’d be glad to help.

If you have any specific questions, don’t hesitate to get in touch. We actually don’t charge many of the card processing fees we’ve just discussed - but we’d be happy to run you through them anyway.

Give us a call, or find out more today.


Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

Sometimes, we link to other third-party websites to provide you with additional information. At the time of publication, we consider the information accurate, however, we do not have control over their content and are not responsible if any information on these websites change.

The products we display on our website are for illustrative purposes only - if your business requires additional facilities, you may receive a different model than advertised.

All of the information contained on this website, including fees, services and functionality, are correct at time of publishing. E&OE.