Card Payment Fees: Reading the Real Cost

Payment pricing is deliberately hard to compare. A headline rate of 1.4% and a rate of 1.69% can produce almost identical costs, or a difference of thousands a year, depending on your average transaction size and mix of card types.

The four numbers that decide it

1. Percentage rate per transaction.
2. Fixed fee per transaction — this dominates if your average sale is small.
3. Monthly account or terminal fees.
4. Surcharges: commercial cards, international cards, currency conversion, refunds and chargebacks.

Beyond price

• Settlement speed: next-day matters more than a 0.1% saving if your cash is tight.
• Hardware cost and whether the terminal works on mobile data when the wifi drops.
• Whether payouts reconcile cleanly into your accounting software, gross of fees with a separate fee line.
• Reserve and account-freeze policies — the most common serious complaint about flat-rate providers.
• Support that answers by phone on a Saturday if you trade at weekends.

Contracts to be careful with

Traditional merchant accounts can be genuinely cheaper at higher volumes, but they are sold with long terms, separate terminal leases and early-exit fees. Never sign a terminal lease longer than the merchant agreement, and always ask for the full fee schedule in writing before you commit.

A reasonable default

Under roughly £10,000 a month, a flat-rate provider with no monthly fee is usually the right answer: the price difference is small and the flexibility is worth more. Above that, it is worth getting two interchange-plus quotes and running them against your own transaction file.