The real cost of taking payments is the fee on each payment plus everything around it: charges for failed collections and chargebacks, monthly add-ons, the wait for your money and the time spent chasing and reconciling. Card fees rise with every pound you invoice, while direct debit and pay by bank are usually capped. Add up a month of all of it, not just the headline rate, before you compare providers.
In this article
The short version
- A card fee pays three parties, and only interchange is capped by law.
- Business cards cost more to accept, so B2B firms often pay the higher rate.
- Check charges for failed payments, chargebacks, branding and large payments.
- Fees deducted from payouts make reconciliation harder.
- Price a full month of payments, not just the headline rate.
The fee on each payment
A card fee looks like one number, but it pays three parties. Interchange goes to the bank that issued your customer's card, the card schemes (Visa and Mastercard) take their own fees, and the rest is your provider's margin. Only interchange is capped by law: 0.2% of the payment on a UK personal debit card and 0.3% on a personal credit card. The Payment Systems Regulator found in 2025 that Visa and Mastercard had raised their core scheme and processing fees by at least 25% since 2017, costing UK businesses at least £170 million a year extra.
Business, corporate and commercial cards are outside the interchange caps, so most providers charge more for them. Stripe, for example, publishes 1.5% + 20p for standard UK cards and 2.8% + 20p for business cards. If you invoice other businesses, you'll see the higher rate more often than the lower one, because finance teams pay on company cards.
If you're a small business, you'll also tend to pay more than a large one for the same payment. The regulator's review of card acquiring found that more than 95% of merchants were on bundled, one-rate pricing, and that small and medium merchants saw little or none of the savings when interchange was capped.
Direct debit and pay by bank are usually priced as a percentage plus a fixed fee, with a cap. Past the cap, a bigger invoice costs little or nothing more to collect. A £3,000 invoice paid on a business card at 2.8% + 20p costs £84.20, against £4.20 by pay by bank where the fee is capped at £4 plus 20p.
The charges outside the headline rate
Two quotes with the same headline rate can cost you very different amounts once the extras are in. These are the lines to check before you sign:
| Cost line | What to ask | On Adfin |
|---|---|---|
| Failed payments | Do you charge when a direct debit fails or is resubmitted? | No charge, and failed direct debits are retried for free |
| Chargebacks and disputes | What's the fee per dispute, and is it refunded if you win? | £15 per chargeback |
| Your name on statements | Is there a monthly fee to show your business name instead of the provider's? | £36 a month, chosen at onboarding |
| Large payments | Is there an extra charge above a certain amount? | +0.3% on direct debits above £2,000 |
| Phone payments | Do card payments taken over the phone cost more? | +0.5% |
| Payouts | Are fees deducted before you're paid, and how often do payouts arrive? | Paid in full every weekday, fee invoiced separately |
| Monthly fees and contracts | Is there a minimum, a platform fee or a fixed term? | None |
Failed payments are the line most often missed. GoCardless, for example, charges its fee on every direct debit you submit, whether or not it succeeds, so a collection that bounces and is resubmitted is paid for twice. Fees taken out of your payouts before they reach you add a different cost: each payout no longer matches the invoices it covers, and someone has to split it back out at month end.
The costs that never appear on a statement
The biggest cost of taking payments often isn't a fee at all. It's the time between sending an invoice and having the money, and the work it takes to close that gap.
Chasing is the obvious one. Every reminder, follow-up call and "just checking in" email takes someone's time, and none of it appears as a line on your payment provider's invoice.
Running several tools adds its own cost. A typical small business might have a direct debit provider, a card processor, a separate chasing tool and an accounting system, each with its own fees, logins and payouts to reconcile. The subscriptions are easy to count. The hours spent matching payments across them are not.
And slow money has a cost too. Card and bank payments that land the same day or within two working days give you a different cash position from a payout that arrives several days after the collection, with fees already taken out.
How to work out your own monthly cost
Take last month's payments and price them in full:
- Add the fee on every successful payment, at the rate for the card type or method actually used.
- Add the fees on failed payments and resubmissions, chargebacks and any monthly add-ons.
- Add what you pay for the tools around your payments, such as a chasing tool or a reconciliation app.
- Put a rough figure on the hours spent chasing and reconciling.
Then price the same month on the alternative. On Adfin's published pricing, each successful payment costs 1% + 20p, the percentage is capped at £4 on direct debit and bank payments (so at most £4.20, plus 0.3% on direct debits above £2,000), and premium cards such as business cards and Amex cost 2% + 20p. A £600 monthly fee collected by direct debit costs £4.20, and a £150 one costs £1.70.
That price also covers the work around the payment: essential credit control is free, chasing goes out over email, SMS and WhatsApp on your schedule, and payments are matched back to invoices in Xero or QuickBooks. Adfin's Customer Agents can add statutory late fees to overdue business invoices, offer instalment plans and pass the card fee on to business customers paying by business card, all within rules you set. Enhanced credit control costs 0.3% per paid invoice, and only when you use it.
Common questions
How much does it cost to take a card payment in the UK? It depends on the provider and the card. Standard UK personal cards are often priced around 1.5% + 20p, with business and commercial cards priced higher because they're outside the interchange caps.
What is a merchant service charge? It's the total you pay your provider for card payments. It covers interchange to the card issuer, scheme fees to Visa or Mastercard and your provider's margin.
Are UK card fees capped? Only interchange is: 0.2% on personal debit cards and 0.3% on personal credit cards. Scheme fees and provider margins have no legal cap.
Is direct debit cheaper than card? On larger invoices, usually. Direct debit fees are typically capped, so past a few hundred pounds the gap grows in direct debit's favour.
Do payment providers charge for failed payments? Some do. GoCardless charges on every submitted direct debit, including ones that fail, while Adfin only charges when a payment succeeds.
What hidden costs should I look for in a payment provider? Fees on failed payments, chargeback fees, monthly fees to show your own name, extra charges on large payments, and fees deducted from payouts before they reach you.
Sources
- legislation.gov.uk - Regulation (EU) 2015/751 on interchange fees (accurate as of October 2026) https://www.legislation.gov.uk/eur/2015/751
- Payment Systems Regulator - Market review into card scheme and processing fees (accurate as of October 2026) https://www.psr.org.uk/our-work/market-reviews/market-review-into-card-scheme-and-processing-fees/
- Payment Systems Regulator - Market review into the supply of card-acquiring services: final report (accurate as of October 2026) https://www.psr.org.uk/media/p1tlg0iw/psr-card-acquiring-market-review-final-report-november-2021.pdf
- Stripe - Pricing and fees (UK) (accurate as of October 2026) https://stripe.com/gb/pricing
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
