Compare Merchant Account Fees: A Guide for UK Businesses

Merchant standing in front of her wares

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Card processing fees are typically between 0.4% to 2.75% for transactions and £9.95 and £75 + VAT for monthly account fees. Picking the card machine provider with the best cost-benefit can greatly help your business stay afloat during the current recession.

Backed by our nearly 15 years of experience, we carried out a deep-dive research into 11 card machine companies, scoring them in five categories – one of which was price. To do that, we looked into the nitty-gritty of their fees, allowing us to tell you what you can expect to pay when using a payment processor.

If they feel daunting to understand, we don’t blame you. With so many fee types (transactional, scheduled, incidental, etc.), it can be complicated to get how much (and how frequently) you shell out to your payment processor. Not to worry: we’ll cover the different fee types here to get you in the know.

Merchant account fees:

  1. Zettle: No monthly fee, transaction fee – 1.75%
  2. Retail Merchant Services: Monthly fee – from £10 + VAT, transaction fee – from 0.4%
  3. Square: No monthly fee, transaction fee – from 1.75%
  4. Dojo: Monthly fee – from £24.95 + VAT, transaction fee – 1.4%
  5. Barclaycard: Monthly fee – £15 – £75, transaction fee – 1.60%

Clicking any of the links above will allow you to compare quotes to find the right merchant account for your business.

Read on to learn more about merchant account and card processing fees.

Or if you want to know what you specifically would pay for card processing, you can use our merchant account cost comparison tool for bespoke quotes and pricing information– it takes just two minutes to use, and it’s 100% free!

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Retail Merchant Services




Monthly Fee


Monthly Fee

From £10 + VAT/month

Monthly Fee


Monthly Fee

From £24.95 + VAT

Monthly Fee
  • Face to face: From £15 – £29
  • Online: £20 – £75
Transaction fee
  • 1.75% in-person
  • 2.5% payment links and invoicing
Transaction fee
  • Bespoke in person
  • 0.79% +10p online
Transaction fee
  • 1.75% for card transactions
  • 2.5% for payment links and invoices
Transaction fee

1.4% credit & debit cards

Transaction fee

1.60% or bespoke

Watch out!

Besides the transaction fees and the monthly account fees, it’s important to know that there are also other fees attached to merchant account services, such as chargeback fees, early termination fees, and setup fees. These will vary according to the provider you choose.

What are card processing fees?

Credit card processing fees are what a business has to pay each team it processes a card payment. The payment provider sets the fee and then takes this fee from each transaction.

Our research shows that transaction fees vary greatly. The cheapest ways to take card payments can charge around 0.4% while others charge 2.75%. Some providers will charge different fees depending on the type of transaction, such as an in-person transaction or an online transaction. Providers sometimes charge different rates, depending on what package you have with them.

Types of merchant account fees

Wholesale vs markup fees: What’s the difference?

At the top level, you can divide your merchant account fees into two camps: wholesale and markup. Wholesale fees are set by the card issuing banks and the card associations involved in the transaction. These are fixed rates.

Wholesale fees aren’t negotiable – you just have to grit your teeth, shrug your shoulders, and pay up. The two most common forms of wholesale merchant account fees are called interchange and assessments.

However, markup fees are negotiable. As the name suggests, markup fees are additional costs applied by the other parties in a credit card transaction – namely the payment gateway, the payment processor, and the merchant services provider.

Transactional, scheduled, and incidental fees

Under the umbrella of wholesale and markup fees, merchant account costs fall into three additional categories:

Transactional fees are what you’ll pay every time you accept a credit or debit card payment. They usually consist of a percentage of the transaction’s value, or a percentage plus a flat rate, for example Stripe which charges 1.4% +20p. Read our review of Stripe.

Interchange fees will make up the largest portion of your wholesale fees in this category, while the processor’s rate markup is your main markup fee here.

Scheduled fees are billed on a consistent basis, usually monthly. These fees include wholesale costs, such as the Fixed Acquirer Network Fee (FANF), as well as markup costs that go to maintaining your account (terminal fee, statement fee), and ensuring you fulfil your requirements for the safe handling of cardholder data.

Incidental fees include chargebacks, and these tend to occur on an irregular basis – and usually never when you want, need, or expect them. Typically there’s an additional fee for each chargeback claim.

How do you need to take card payments?

Compare Fees

Where do your credit card processing fees go?

Credit card processing fees go to the financial institutions involved with processing the actual transaction.

For wholesale fees, these are:

  • The card issuer (or card issuing bank). This is any bank that provides credit or debit cards to consumers (think Santander, HSBC, or Lloyds). The card issuers set the rates for (and collect) the interchange fees you pay.
  • The card associations. These are networks of banks responsible for processing transactions made with a specific brand of card, such as American Express, Visa, and Mastercard. Card associations take their cut in the form of assessment fees, a wholesale cost you’ll hear more about below.

Markup fees are collected by:

The credit card processor or, specifically, the merchant services provider. This is the entity in charge of handling debit and credit card transactions on behalf of your business.

Your merchant account provider levies these fees to cover its own wholesale costs, pay for third-party services, and make a tidy profit.

The payment gateway. This is a piece of software that helps verify, secure, and authorise the transaction, such as Square. While some processors provide in-built technology to manage this, most have to outsource to a payment gateway provider. This costs money, and you can bet that those processors are passing that bill straight on to you!

Transactional fees

Here are the fees you can expect to pay on every transaction your business takes when accepting a credit or debit card payment.


Interchange fees are the biggest expense you’ll pay per transaction. These are non-negotiable rates set by the card issuing banks  and are, sadly, unavoidable.

That said, exactly what you’ll pay in interchange fees per transaction depends on how the payment is processed (i.e. swiped, dipped, keyed, or contactless), as well as the type of card your customer uses (i.e. debit, credit, rewards, personal, or corporate).

Interchange rates are some of the visible credit card processing fees you’ll pay. Visa and Mastercard both publish their rates online, though you’ll need to wade through a lot of numbers to dig out the figures most relevant to your business.

Typical interchange fees consist of a percentage of the transaction’s value, plus a flat rate on top. Most rates hover between 0.4% and 2.75% of the payment, plus a fee of around 10 to 20 pence, for example Revolut which charges 1% +20p.


Assessment fees go to the card associations, such as Visa, Mastercard, and American Express, to compensate them for their role in the transaction.

This type of charge will vary depending on the card brand, the type of card used to pay(credit/debit), and whether the transaction takes place within the UK or internationally. Assessment fees range from around 0.12% to 0.15% on each card transaction you accept.

Processor’s rate markup

In addition to the wholesale fees above, you’ll also be liable to pay a processor’s rate markup fee.

This (highly negotiable) fee is added on by the company you choose to process your payments with – whether that’s a bank or a third-party merchant services provider, also known as ISOs (independent service organisation).

However, it’s not always easy (if at all possible) to differentiate the processor’s rate markup fees from the ones you have to pay. This is because there are four different pricing plans that are commonplace in the industry. Where one plan might clearly list each fee and where it comes from, another will bundle all the costs together and slap you with a single, static fee for all transactions.

It must be noted that these fees are likely to be higher if your business is classified as high risk, such as travel, gambling, pharmaceuticals, or adult entertainment.

In fact, if this sounds like you, you’ll require a completely different type of merchant account. To find yours, explore our guide to the best high risk merchant accounts for UK businesses.

Scheduled fees

Here are the fees you can expect to pay on an ongoing basis – most likely every month.

Mastercard merchant location fee

Mastercard charges businesses a fee of £15 per year, per location. However, this is just £3 per year if you’re using a payment facilitator, such as Square. Your merchant services provider may mark this up – so keep an eye out for this one in your statement, and remember to negotiate before signing a contract!

Fixed Acquirer Network Fee (FANF)

The FANF is simply a fancy name for a cost that Visa charges merchants every three months. As the name suggests, it’s a flat, fixed fee – though exactly what you’ll pay depends on your sales volume, and the type of business you run.

Monthly fee

Monthly costs are added to your bill by your dedicated merchant services provider, and usually go towards maintaining a good standard of customer support. Depending on just how high that standard is (or how greedy your provider is), these fees can range from anywhere between £5 and £100 per month.

Annual fee

Often levied under the dubious justification of ‘maintaining your account’, some processors will also charge an annual fee of up to £300 per year. We’d suggest thinking very carefully about partnering with a merchant account provider that charges an annual fee – particularly if monthly fees also apply!

PCI compliance fee

The Payments Card Industry Data Security Standard (PCI DSS, or PCI for short) is a set of guidelines that all merchants who accept card payments have to follow.

If your business is compliant, you’ll be eligible for this scheduled fee, to help ensure it remains so (it’s around £5 to £10 per month). If you’re not compliant, that’s a pricier fee, which we’ll get into below.

Minimum Monthly Service Charge (MMSC)

When you open a merchant account, there may be a monthly minimum fee specified in your contract. This is a set amount in transaction volume that you’ll be required to meet each month.

If, for whatever reason, sales are bad and you don’t meet this threshold – and thus don’t end up paying the required amount of fees to your merchant services supplier – you’ll have to face this cost. This fee starts from around £9.95 but can go up to £75.

PDQ machine rental fee

If you opt for a traditional merchant account provider, chances are you’ll have to pay a fee to rent or lease your card machine – usually on a monthly basis. With costs ranging anywhere from £5 to more than £50 per month, it’s a frustrating fee – and one that tends to add up quickly.

The good news is that if you opt for a payment facilitator such as Square, Zettle, or SumUp to process your payments, you won’t have to worry about this. These companies offer their terminals at nominal costs, which start at around £19 (excl. VAT), and their devices are among the best card machines for small businesses.

Statement fee

You’ll only pay this if you (or your provider) have deemed it necessary to receive your processing bills in the mail. If you have, you could be stung with fees up to £10 per month!

Our advice? Get everything sent out electronically as  you’ll bypass this fee entirely.

Payment gateway fee

Similar to the terminal fee above (but for ecommerce businesses), the payment gateway fee helps cover the costs of businesses that accept card transactions through their website(s), or a virtual terminal.

This cost amounts to around £10 to £20 per month, or may take the form of a small percentage of each ecommerce transaction.

Incidental fees

The following costs are applied on a one-off basis, or as penalties for failing to comply with industry standards.

Processing integrity fees

Like assessment fees, processing integrity fees go to the card association brands – think Visa, Mastercard, or American Express. Unlike assessment fees, you’ll only face a processing integrity fee if you’ve done something wrong.

Among the reasons you might be penalised are if a transaction isn’t settled within 24 hours, Address Verification Service (AVS) isn’t applied to transactions made with a virtual terminal, or if a payment isn’t authorised to the standards of the relevant card association.

Visa’s integrity fee is £0.10, while Mastercard charges a minimum of £0.040 for breaches. American Express will penalise you 0.75% for non-compliant transactions, but these aren’t as common as they are with Visa or Mastercard.

Setup fee

When you enter into a credit card processing agreement, some providers will charge a one-off establishment fee. This doesn’t go towards anything except lining the merchant account provider’s pocket, so the company can essentially charge as much as it wants – though it shouldn’t be more than £100.

Chargeback fee

When a customer disputes a card payment they’ve made through you, it gets investigated. If the customer is ruled to be in the right, the sale is refunded, and you get slapped with an extra fee of anywhere between £15 and £30 per chargeback. Ouch!

Early termination fee

Most merchant account providers will charge a fee if you want to get out of a contract early. This can be anywhere from £200 to over £1,000,. If you plan to leave a contract early, look to negotiate a lower cost here.

Or, better still, choose a payment facilitator such as Zettle as Zettle’s fees operate on a pay-as-you-go basis and you won’t be roped into a contract.

Account closure fee

This fairly self-explanatory fee is levied when you close your account – whether early or otherwise. It comes in at anywhere between £15 and £70.

PCI non-compliance fee

This is a monthly fee you’ll be liable for if your business fails to meet the PCI’s rigorous list of standards. This can be in the region of £30 to £40 – so it’s in your best interests to get it right!

Refund fee

This is a free applied by some merchant account providers when you do a refund on a card machine, in order for them to process it.

Pricing structures

Don’t fall into the trap of being rushed into the wrong plan by a good salesperson. Rather take a couple of minutes to explore all of your options below:


Best for businesses seeking transparency

This plan offers the most transparent pricing, listing all wholesale fees on your statement as separate from the markup fees. This way, it’s easy to see what you’re paying because you have to, and what you’re paying as arbitrary concessions to the provider.

Knowing this makes it easier to renegotiate better terms, or find yourself a better deal elsewhere when your current contract ends.


Best for businesses with large transactions

Like the interchange-plus structure, a subscription plan itemises wholesale and markup fees separately.

However, your interchange fees will come as a flat rate, rather than as a percentage of each transaction. In addition, you’ll pay a monthly fee for your merchant services.

For this reason, it’s ideal for businesses looking to accept higher value transactions. Rather than have your merchant account provider take a cut of your profits, you’ll just pay a predictable, fixed fee to take card payments.


Best for small businesses and sole traders

Flat-rate pricing offers ultimate simplicity. With this plan, all credit card processing costs – whether wholesale or markup – are blended and packaged into a single fee (usually a percentage of each transaction). You’ll pay the same rate, regardless of the card’s type (credit/debit) or brand (American Express, Visa, Mastercard, etc.).

However, this simplicity comes at the cost of some transparency around what you’re paying.

A single, set cost for large and small transactions alike means that we certainly wouldn’t recommend this model for larger merchants.But small businesses, such as market traders, seasonal enterprises, and micro-merchants, will enjoy the lack of ongoing monthly fees or a credit check.

Next steps

The most common fees attached to using a payment provider is the transaction fee and the monthly account fee. Transaction fees are typically anywhere between 0.4% to 2.75% per transaction, although the average is 1.30% per transaction. Monthly account fees can be anywhere from £9.95 to £75 + VAT, but the average fee is typically around £25 per month.

Some mobile card readers don’t have a monthly account fee. Instead, once you’ve purchased the reader, your only recurring fee is the transaction fee.

If you want to compare the cost of payment providers you can use our free quote comparison tool. Through it, we’ll quickly match you with trusted providers. They’ll then be in touch to provide bespoke quotes tailored to your needs.

Merchant account fees FAQs

What is the average merchant services fee?
Merchant services fees average around 1.30% for transactions and £25 + VAT for monthly account fees.
What is a monthly merchant fee?
Monthly merchant fees (or monthly account fees) are base fees charged by merchant account providers for you to have access to their services. Usually charged by traditional merchant accounts – such as Worldpay and takepayments – they do represent a fixed cost, but they usually come with lower transaction fees. On the other hand, mobile merchant accounts – like Square and SumUp – don’t tend to charge them, but charge higher transaction fees.
Are merchant accounts free?
Merchant accounts aren’t free – at least not completely. While some providers offer free signup and no monthly charges, they do take a bite off your payment in the form of transaction fees.

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Written by:
Rob Binns
Rob writes mainly about the payments industry, but also brings to the table industry-specific knowledge of CRM software, business loans, fulfilment, and invoice finance. When not exasperating his editor with bad puns, he can be found relaxing in a sunny (socially-distanced) corner, with a beer and a battered copy of Dostoevsky.
Reviewed by:
Ruairi uses his 3+ years of research experience to uncover insights which can help Expert Market provide the best business solutions for their users. He has done this by meeting with business owners to find out what is important to them and what challenges they face on a daily basis. Ruairi specialises in tools that can be used to grow your business and has done research for a wide range of categories on Expert Market, such as EPOS, Website Builders, and Merchant Accounts.