Card payment processing (see also EPOS system costs) is essential for almost every UK business, but the costs can be confusing — transaction fees, monthly charges, hardware, PCI compliance, and hidden extras all add up. This guide breaks down exactly what you’ll pay across 8 leading providers, so you can choose the right setup for your business.
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- Card machine transaction fees range from 0.3% to 1.75% - the gap costs a business processing £10,000/month an extra £145/month at the higher rate
- Fixed monthly fees of £47–£99 from traditional providers - make them expensive for businesses under £10,000/month turnover
- SumUp and Square charge £0/month - pay-per-transaction models suit businesses with variable or low card volumes
- Average processing cost: 1.2–2.5% of card turnover - depending on card mix (debit vs credit vs Amex) and pricing model
- Interchange-plus pricing saves 15–30% above £20,000/month - worth negotiating once volumes justify the complexity
How Much Does Card Payment Processing Cost?
Card payment processing costs 1.69–1.75% per in-person transaction with flat-rate providers like Square and SumUp, or 0.4–1% + monthly fees with traditional acquirers like Worldpay and Barclaycard. Most small businesses pay £30–£100/month in total fees on £5,000–£10,000 monthly card turnover.
Payment processing costs fall into four categories: transaction fees (charged per sale), monthly/fixed fees (charged regardless of volume), hardware costs (one-off or terminal rental), and incidental fees (chargebacks, PCI non-compliance). The total depends on your monthly turnover, average transaction value, and whether you process cards in person or online. For context on how UK payment volumes are growing, see our mobile payment statistics.
| Cost Type | Flat-Rate Providers | Traditional Acquirers | Notes |
|---|---|---|---|
| In-person transaction fee | 1.69% – 1.75% | 0.4% – 1% | Flat-rate = simple; traditional = negotiable |
| Online transaction fee | 1.4% – 2.5% + 25p | 0.7% – 1.9% + auth fee | Higher due to fraud risk |
| Monthly fee | £0 (free plans available) | £15 – £30 | Traditional add PCI, terminal rental, gateway |
| Hardware | £19 – £699 (buy) | £0 upfront (£20–£30/mo rental) | Buy = no ongoing cost; rent = monthly |
| Contract | No contract (cancel anytime) | 12–36 months | Early termination fees on contracts |
Transaction Fees by Provider
In-person card transaction fees range from 0.4% (Worldpay interchange++) to 1.75% (Square, PayPal POS (formerly Zettle)). Flat-rate providers charge the same percentage on every transaction, while traditional acquirers charge different rates for debit cards (lower), credit cards (mid), and business/international cards (highest).
| Provider | In-Person | Online | Monthly Fee | Contract | Pricing Model |
|---|---|---|---|---|---|
| Square | 1.75% | 1.4% + 25p (UK) / 2.5% + 25p (intl) | £0 | None | Flat rate |
| SumUp | 1.69% | 2.50% | £0 | None | Flat rate |
| PayPal POS (PayPal) | 1.75% | 2.5% | £0 | None | Flat rate |
| Tide | 1.5% + 5p† | N/A | £0 | None | Flat rate |
| Worldpay | 0.4–0.6% (debit) / 0.7–1% (credit) | 0.7–1.9% + 4.5p auth | From £22.50 | 18 months | Interchange++ |
| Barclaycard | 0.6–1.75% (debit) / 0.95–2.45% (credit) | 0.85–2.75% + 4.5p auth | From £28 | 12–36 months | Interchange++ |
| takepayments | Quote only | Quote only | Quote only | 12 months | Interchange++ |
| Stripe | N/A (online only) | 1.5% + 20p (UK) / 2.5% + 20p (intl) | £0 | None | Flat rate |
Flat-rate providers (Square, SumUp, PayPal POS) are simpler but more expensive per transaction. Traditional acquirers (Worldpay, Barclaycard) offer lower rates but charge monthly fees and require contracts. The break-even point is typically around £10,000–£15,000 monthly turnover — below that, flat-rate is usually cheaper; above it, interchange++ saves money.
†Tide’s PAYG rate is 1.5% + 5p with no monthly fee. A reduced rate (0.89% + 3p) is available on the £17.99 + VAT/month Sell In Person subscription (hardware From £99) (consolidated April 2026 from prior two-tier plans).
For detailed reviews, see our guides to Square, Worldpay, Stripe, and SumUp.
Card Machine Hardware Costs
Card machines cost £19–£699 to buy outright or £15–£30/month to rent from a traditional acquirer. The cheapest option is a basic card reader (Square Reader at £19), while a full countertop terminal with receipt printer costs £149–£699. Renting avoids upfront costs but is more expensive over 2+ years.
| Machine Type | Buy (one-off) | Rent (per month) | Best For |
|---|---|---|---|
| Basic card reader | £19 – £79 | N/A (buy only) | Market stalls, pop-ups, low volume |
| Mobile terminal | £79 – £169 | £15 – £20 | Delivery, field service, mobile vendors |
| Countertop terminal | £149 – £399 | £20 – £30 | Retail shops, salons, restaurants |
| All-in-one POS register | £399 – £699 | £25 – £40 | Multi-product retail, hospitality |
| Provider | Reader | Terminal | Register / POS |
|---|---|---|---|
| Square | £19 + VAT | £149 + VAT | £699 + VAT |
| SumUp | £79 + VAT (Solo) | £135 + VAT | £290 + VAT (POS Lite bundle) |
| PayPal POS | £29 | £149 | £399 (Store Kit) |
| Tide | £99 – £119 | N/A | N/A |
| Worldpay | N/A | From £22.50/mo (rental) | From £30/mo (rental) |
For most small businesses, buying a card reader outright (£19–£79) is the cheapest option. You own the device, there are no monthly rental fees, and you can switch providers without returning equipment. Renting makes sense only if you need a countertop terminal and want to avoid the £149–£399 upfront cost.
For a full hardware comparison, see our credit card machines guide.
Monthly and Fixed Fees Explained
Beyond transaction fees, traditional providers charge £15–£30/month in fixed fees covering PCI compliance (£4–£6), terminal rental (£15–£30), minimum monthly service charge (£15–£30), and payment gateway (£10–£28). Flat-rate providers like Square and SumUp charge £0/month on their free plans.
| Monthly Fee | Flat-Rate Providers | Traditional Acquirers | What It Covers |
|---|---|---|---|
| PCI DSS compliance | £0 (included) | £4 – £6 | Data security certification |
| Terminal rental | £0 (you buy) | £15 – £30 | Card machine hardware |
| Minimum monthly service charge | £0 | £15 – £30 | Minimum fees if transaction volume is low |
| Payment gateway | £0 (included) | £10 – £28 | Online payment processing |
| Paper statement fee | £0 (digital only) | £3 – £5 | Opt for digital to avoid |
| Total monthly fixed costs | £0 | £47 – £99 | — |
Hidden Fees and One-Off Charges
Watch for setup fees (£0–£100), early termination penalties (3–12 months of fees), chargeback fees (£15–£25 per dispute), and PCI non-compliance penalties (£20–£40/month). Flat-rate providers generally have no hidden fees, while traditional acquirers may have a dozen additional charges buried in the contract.
| Fee | Typical Cost | Who Charges It | How to Avoid |
|---|---|---|---|
| Setup / onboarding | £0 – £100 | Traditional acquirers | Negotiate waiver |
| Early termination | 3–12 months of fees | Contract-based providers | Choose no-contract providers |
| Chargeback fee | £15 – £25 per dispute | All providers (exc. Square £0) | Strong fraud prevention |
| PCI non-compliance | £20 – £40/month | Traditional acquirers | Complete PCI SAQ annually |
| Refund processing | £0 – £0.25 per refund | Varies | Most flat-rate = free |
| Authorisation fee | 3–5p per transaction | Traditional acquirers | Included in flat-rate pricing |
| Account closure | £0 – £50 | Some traditional providers | Check contract terms |
Square is notable for charging £0 for chargebacks — they absorb the cost themselves. Most other providers pass the £15–£25 chargeback fee directly to you, even if the dispute is resolved in your favour.
What You’ll Actually Pay: Worked Examples
A coffee shop processing £5,000/month in card payments would pay £84.50–£87.50/month with flat-rate providers (transaction fees only) vs £67–£147/month with traditional acquirers (lower transaction fees but monthly charges added). The cheaper option depends entirely on your monthly card volume.
| Scenario | Square (1.75%) | SumUp (1.69%) | Worldpay (IC++) |
|---|---|---|---|
| Café — £5,000/mo | £87.50 | £84.50 | £67 – £100* |
| Retail shop — £15,000/mo | £262.50 | £253.50 | £135 – £200* |
| Restaurant — £30,000/mo | £525 | £507 | £210 – £350* |
| E-commerce — £50,000/mo | £950 | £1,250 | £450 – £700* |
*Worldpay figures include estimated monthly fees (£22.50 terminal + £5 PCI + £15 MMSC). Transaction fee estimates assume 70% debit / 30% credit card split. Actual rates are quote-based and negotiable.
Pricing Models Explained
There are three main pricing models: flat rate (same % on every transaction — simple but more expensive), interchange++ (wholesale cost + small markup — cheapest for high volume), and tiered/blended (bundled rates by card type — harder to compare). For most SMBs, either flat rate or interchange++ is the best option.
| Pricing Model | How It Works | Best For | Providers |
|---|---|---|---|
| Flat rate | Same % on every transaction (e.g., 1.75%) | Under £10K/mo, simple billing | Square, SumUp, PayPal POS, Stripe |
| Interchange++ | Wholesale interchange + scheme fee + acquirer markup | Over £15K/mo, cost-conscious | Worldpay, Barclaycard, Elavon, Clover |
| Tiered / blended | Bundled rates by card category (qualified/non-qualified) | Legacy contracts | Some traditional acquirers |
Interchange++ is the most transparent model because you see exactly what you’re paying at each level: the interchange fee (set by Visa/Mastercard, regulated by the PSR), the scheme fee (set by card networks), and the acquirer’s markup (the only part that’s negotiable). If a provider won’t offer interchange++ pricing, they may be hiding a large markup.
For more on how to negotiate processing fees, see our complete merchant account guide.
Cost by Business Type
Your industry affects processing costs. Standard retail and hospitality get the best rates (1.69–1.75% flat or 0.4–1% IC++), while high-risk businesses (adult, gambling, CBD) pay 2.5–5% + higher monthly fees. Online-only businesses pay more than in-person because of higher fraud risk.
| Business Type | Typical In-Person Fee | Recommended Provider |
|---|---|---|
| Sole trader / freelancer | 1.69% – 1.75% | SumUp or Square (no monthly fees, no contract) |
| Retail shop | 1.69% – 1.75% (under £10K/mo) | Square or PayPal POS (buy terminal outright) |
| Restaurant / hospitality | 1.69% – 1.75% or IC++ | Square for Restaurants or Worldpay |
| E-commerce only | 1.4% + 20p – 2.5% + 25p | Stripe (developer-friendly) or Square Online |
| Multi-channel (in-store + online) | Blended IC++ or 1.75% | Square, Worldpay, or Clover |
| High-risk (adult, CBD, crypto) | 2.5% – 5% | Specialist acquirers (Paymentworld, Inovapay) |
| Non-profit / charity | 1.5% – 1.69% | SumUp (reduced rate) or Stripe (non-profit pricing) |
For high-risk merchant accounts, see our high-risk merchant accounts guide.
How to Reduce Your Payment Processing Costs
You can save 20–40% on processing costs by switching to the right pricing model, negotiating rates based on volume, encouraging debit card payments (lower interchange), and avoiding unnecessary monthly fees. The biggest savings come from comparing providers and switching — most businesses overpay because they never shop around.
- Compare at least 3 providers. Processing fees vary by 50%+ for equivalent service. Use our free quote comparison above to get current rates.
- Switch to interchange++ if you process over £10K/month. The transparent pricing typically saves 0.3–0.8% per transaction compared to flat-rate or blended pricing.
- Negotiate at renewal. Existing customers can typically secure a 10–20% reduction simply by asking. Mention competitor rates as leverage.
- Encourage contactless and debit. Debit card interchange is capped at 0.2% (vs 0.3% for credit), and contactless reduces chargebacks.
- Avoid terminal rental. Buying a £19–£149 device outright eliminates £180–£360/year in rental fees.
- Complete your PCI SAQ. PCI non-compliance penalties of £20–£40/month are completely avoidable by completing the annual self-assessment questionnaire.
For a full comparison of providers and pricing, see our top merchant account providers guide and third-party payment processors guide.
Compare costs by provider: See our reviews of Tide (1.5% PAYG, no monthly fees) and Revolut (from 0.8%, bundled with Revolut Business plan). For remote payments, read our virtual terminal guide. If your credit history is a concern, see no credit check merchant accounts.
How to Choose a Merchant Account Provider
Choose based on your monthly card turnover, business type, and need for flexibility. Under £10K/month → flat-rate (Square, SumUp). Over £15K/month → interchange++ (Worldpay, Barclaycard). Online-only → Stripe. Need both in-store and online → Square or Worldpay. Always check the total cost including fees, hardware, and contract terms.
Decision checklist:
- Monthly card turnover: Under £5K = flat-rate (SumUp). £5K–£15K = either model. Over £15K = interchange++.
- Contract flexibility: Need to cancel anytime? Choose Square, SumUp, or PayPal POS (no contracts). Willing to commit? Traditional acquirers offer lower rates on 12–36 month terms.
- Hardware needs: Just a card reader? SumUp or Square from £19. Full POS system? Square Register (£699) or Clover (£599).
- Online payments: Need e-commerce? Stripe (developer-friendly), Square Online (simple), or Worldpay (enterprise).
- Settlement speed: Next-day payouts are standard. Same-day or instant cost extra (Square: 1.5% fee).
- Support: Flat-rate providers have limited phone support. Traditional acquirers offer dedicated account managers for larger businesses.
Related guides: For a side-by-side comparison of the lowest-cost hardware options, see our guide to the cheapest card machines in the UK. If you need an online payment gateway rather than a physical terminal, our best payment gateways UK comparison covers Stripe, PayPal, Square Online, and more.
