Seven hidden card-processing charges every UK business should check

A card-processing quote can look attractively simple: a percentage for face-to-face transactions and a monthly terminal rental. But the amount leaving your bank account can be shaped by several other charges, different rates for different transactions and contract terms that do not appear in the headline.

This does not mean every extra line is unfair or avoidable. Payment providers have genuine costs and offer different combinations of hardware, support, settlement and reporting. The important thing is to understand the complete price before comparing one offer with another.

Why the headline rate can be misleading

The UK Payment Systems Regulator explains that a merchant service charge can include interchange, card-scheme fees and the acquirer's costs and margin. A provider may combine those elements into a blended rate or show some of them separately. Other charges—such as terminal rental, authorisation, gateway access or minimum monthly charges—may sit outside that rate.

That is why two quotes with the same headline percentage can produce different monthly bills. A business taking mostly UK consumer debit cards face to face may have a different result from one taking commercial, international or online payments, even at the same turnover.

The seven charges to check

1. Minimum Monthly Service Charge (MMSC)

An MMSC is a minimum amount the provider may require you to generate in eligible processing charges each month. If those charges fall below the agreed minimum, the provider may charge the shortfall.

For example, if the minimum is £20 but only £13 of qualifying charges are generated, the contract may allow a further £7 charge. The exact calculation varies: terminal rental, PCI-related charges and other fees may not count towards the minimum.

Check: the monthly minimum, which fees count towards it, whether it applies per merchant account or outlet, and how it affects quieter months.

2. Authorisation fees

An authorisation fee is usually a fixed amount charged when a transaction is sent for approval. It can be added on top of the percentage processing rate. Depending on the agreement, it may apply to approved transactions, attempted transactions or different transaction types.

A small fixed fee matters more when the average sale value is low. Ten thousand transactions at 3p each add £300 before percentage charges.

Check: the price per authorisation, which attempts attract it, and whether refunds, reversals or declines are treated differently.

3. PCI-related charges

PCI DSS is the Payment Card Industry Data Security Standard. It provides baseline technical and operational requirements for protecting payment-account data and applies to organisations that store, process or transmit it—or can affect the security of that data.

The PCI Security Standards Council (PCI SSC) develops and maintains PCI DSS. PCI DSS is the standard; PCI SSC is the organisation behind it. PCI DSS is not a monthly product sold by the council. Some payment providers nevertheless charge for a compliance portal, support, validation tools or administration. They may also apply a contractual non-compliance charge when required validation has not been completed or maintained.

Paying a non-compliance charge does not make a business compliant. Ask what actions you must complete, what the provider's charge includes and when it stops.

Check: the monthly or annual PCI service charge, the validation process, any non-compliance charge, and your continuing security responsibilities. The PCI Security Standards Council's merchant resources are the authoritative starting point.

4. Card-not-present and secure-transaction fees

Card Present (CP) normally means the customer and card are physically present at the point of sale. Card Not Present (CNP) generally covers online, telephone and other remote transactions. The latter can carry different rates because the processing method and fraud risk differ.

A provider may also charge separately for authentication, fraud screening, a virtual terminal or other security services. A “secure transaction fee” is not necessarily the same thing as the CNP processing rate, so do not assume one quoted percentage covers both.

Check: rates for online and telephone transactions, gateway or virtual-terminal charges, authentication fees, refund fees and any monthly minimums.

5. Gateway, portal and statement fees

An online payment gateway passes transaction information between your checkout and the payment-processing system. A management portal may provide statements, reports or account controls. Providers can charge monthly, per transaction or through a combination of both.

Some businesses also pay a separate statement fee, especially for paper statements. The word “gateway” is used differently across the market, so establish whether the service is for ecommerce payments, reporting access, a virtual terminal or several functions together.

Check: what the monthly fee unlocks, any included transaction allowance, the price above that allowance and whether statements are available without another charge.

6. Equipment rental

Terminal rental is usually quoted per device per month and often excluding VAT. The processing agreement and terminal-rental agreement may also have different suppliers, durations and cancellation conditions.

A low processing rate can be offset by several terminal rentals or a long minimum term. Conversely, reliable hardware, replacements and support have value, so compare the service as well as the figure.

Check: the number of devices, price per device, VAT, contract length, replacement arrangements, connectivity charges, ownership and early-termination terms.

7. Contract, exit and exception charges

The less visible cost may be what happens outside normal processing. Potential examples include early-termination charges, chargeback administration, retrieval requests, refunds, non-sterling transactions, currency conversion, premium support and changes after an introductory period.

The Payment Systems Regulator's market review found that pricing structures and headline rates varied, while terminal contracts and early-termination charges could make switching harder for some small and medium-sized merchants.

Check: the minimum term, notice period, renewal rules, cancellation costs, price-review clauses and the full tariff for unusual transactions.

Blended, Interchange+ and Interchange++ explained

These labels describe how underlying card-payment costs and the acquirer's charge are presented. They do not, by themselves, tell you which quotation will cost less.

Interchange is, in a typical four-party card payment, paid by the acquirer to the bank or provider that issued the customer's card. Its amount can vary according to factors including card and transaction type. Scheme fees relate to the card scheme, while the acquirer's margin covers its own service and commercial return.

How to calculate your effective rate

A useful first comparison is your effective rate for a representative period:

Total relevant card-processing costs ÷ card turnover × 100 = effective rate

Decide which costs to include and be consistent across every quotation. For a broad cost comparison, that may include merchant-service charges, authorisations, gateway and statement fees, PCI-related charges and terminal rental. Keep VAT treatment consistent.

Suppose a business processes £30,000 in a month and pays £435 across the relevant processing and service charges. Its broad effective rate is 1.45%. That does not prove the agreement is good or bad, but it provides a more useful baseline than one headline rate.

Use several months if sales are seasonal. Then ask each prospective provider to price the same transaction profile rather than applying an advertised rate to every sale.

A practical comparison checklist

1. Gather evidence: recent processing statements and all current processing, terminal and gateway agreements.
2. Record the transaction mix: turnover, transaction count, average value and split between face-to-face, online and telephone sales.
3. Note card categories: consumer, commercial and international cards can be priced differently.
4. List every fixed charge: include MMSC, authorisation, PCI-related, gateway, statement and equipment charges.
5. Check the contract: minimum term, notice, renewals, price changes and early-termination costs.
6. Compare like with like: use the same sales profile, period and VAT basis for every offer.
7. Read the formal agreement: the provider's quotation, tariff and contract take priority over marketing material.

When should you review card payments and EPOS?

A review can be useful before a contract ends, but also when your transaction volume, average sale value or payment channels change; when you add a site or terminal; when your EPOS requirements develop; or when new fees appear on a statement.

The aim is not simply to find the smallest percentage. Settlement speed, reliability, support, integrations, security processes and contract flexibility can matter just as much to day-to-day trading.