The fee you pay to take a card payment has three parts, and only one of them is capped by law. The Payment Systems Regulator puts what a small merchant actually pays at 2.76% to 2.78% of turnover, falling to around 1% for larger ones. Bank debit is priced differently again, with a cap that stops the fee growing.
In this article
The short version
- Your card fee has three parts. Interchange goes to the bank that issued the card, the schemes charge their own fees on top, and the rest is your acquirer's margin.
- UK interchange is capped at 0.2% of the transaction on consumer debit and 0.3% on consumer credit.
- Commercial cards are excluded from the scope of those caps, so they cost you more, and that's exactly why the law lets you surcharge them.
- Scheme and processing fees aren't capped at all. The PSR found Mastercard and Visa raised them by more than 30% in real terms over five years, after allowing for volume changes.
- The regulator's own figures put the smallest merchants at 2.76% to 2.78% and merchants above £180,000 of card turnover at 0.93% to 0.97%. Those are 2020 numbers, and they're the only regulator figures published.
- Bank debit prices are capped by the provider, so past roughly £400 an invoice the fee stops rising.
The three parts of a card fee
Almost every guide to card fees quotes you a headline rate and stops there. The regulator has done the work of taking that rate apart, and hardly anybody cites it.
The PSR defines the bill as the "merchant service charge (MSC), which is the total amount merchants pay to acquirers for card-acquiring services. This comprises interchange fees, scheme and processing fees and acquirer net revenue" (Payment Systems Regulator, market review interim report, May 2024).
Read that as three separate suppliers taking a slice of your payment. Interchange goes to the bank that issued your customer's card. Scheme and processing fees go to Mastercard or Visa for running the network. Acquirer net revenue is your own provider's margin, and it's the only one of the three you can negotiate.
Only one of the three is capped, and the one that has grown fastest is neither capped nor yours to argue about. So when your effective rate creeps up without anybody telling you, the middle component is usually what moved.
The capped part: interchange
Interchange is the biggest slice on most consumer card payments, and it's fixed by law. On a UK debit card transaction, payment service providers "shall not offer or request a per transaction interchange fee of more than 0,2 % of the value of the transaction". On a UK credit card transaction the ceiling is 0.3%.
Those caps reach you through the Interchange Fee Regulation, retained in UK law after Brexit. The instrument has been marked for future revocation under the Financial Services and Markets Act 2023, but that hasn't taken effect, so the caps are live law today.
The scope of the regulation is where your costs get decided. It excludes transactions with commercial cards, ATM withdrawals and three party schemes. Every card outside the scope can carry whatever interchange the issuer and the scheme agree.
Scheme and processing fees
No legal ceiling applies to these, and the regulator has been fairly blunt about what has happened to them.
In May 2024 the PSR found that Mastercard and Visa had "increased their scheme and processing fees by more than 30% in real terms" over the past five years, after taking account of volume changes. An earlier finding covering 2014 to 2018 put the increases at 80% and 115%. The PSR said it "did not identify any justifications for the increases".
Cross-border payments moved further and faster. After Brexit, interchange on UK to EEA online transactions rose from 0.2% to 1.15% on debit and from 0.3% to 1.5% on credit, and the PSR put the cost to UK businesses at £150 to £200 million a year. If you sell to European customers online, that's a fivefold jump on the capped rate you'd pay domestically.
The regulator has finalised two remedies, Specific Directions 22 and 23, and has a third out for consultation. None of that puts money back on your statement this year, though it does mean scheme fees are a live regulatory question, so your renewal quote is worth reading closely rather than signing.
What does a small business pay?
Here's where the regulator's work earns its keep for you. The PSR's card-acquiring market review published average merchant service charges by annual card turnover, and the pattern is stark. Find your own turnover in the left column.
| Annual card turnover | Average merchant service charge |
|---|---|
| £0 to £15,000 | 2.76% to 2.78% |
| £15,000 to £180,000 | 1.18% to 1.22% |
| £180,000 to £380,000 | 0.93% to 0.97% |
A merchant turning over £10,000 a year on cards pays roughly three times the rate of one turning over £200,000, for the same payment on the same rails. Interchange is identical for both of you, so the gap is in the other two components and in what a small merchant can negotiate, and that's very little.
Two caveats belong with those numbers, and they're the reason to state them carefully. The figures come from the review's Annex 2, published in September 2020, so they're five years old at the time of writing. And they're the only regulator figures published on this, which is why they're worth quoting despite the age. Treat them as the shape of the market rather than as the quote you'd get this year.
Why a company card costs you more
The caps apply to consumer cards. Commercial cards, the ones issued to employees for business spending, are outside the scope of the regulation, so the interchange behind them isn't limited.
You'll see that in your own pricing before you ever see it in a regulation. Providers routinely charge a premium rate on premium and commercial cards: Stripe publishes 1.5% + 20p for standard UK cards and 2.8% + 20p for premium ones, and Adfin adds 1% for premium and EEA cards and 2% for non-EEA ones. Same customer, same invoice, a different piece of plastic, and a materially different cost to you.
The law joins those two facts up. Surcharging a consumer card is banned outright, and surcharging a commercial card is permitted so long as the fee doesn't exceed what that payment actually costs you. The higher cost is the reason the exemption exists. If you bill other businesses, a good share of your card payments arrive on exactly the cards you're allowed to surcharge. Our guide to payment surcharges sets out the legal test and the averaging rule that trips people up.
What providers charge today
Published rates move, and none of the pricing pages carry an effective date. Everything below was taken from the providers' own published pricing on 16 August 2026 and needs re-checking against their pages before you rely on it.
| Provider | Cards | Bank debit | Notable extras |
|---|---|---|---|
| GoCardless | Not offered | Standard 1% + 20p capped £4; Advanced 1.25% + 20p capped £5; Pro 1.4% + 20p capped £5.60 | +0.3% on transactions over £2,000 on direct debits; international 2% to 2.4% + 20p; custom branding +£50 a month; fully customised checkout +£150 a month. Excludes VAT |
| Stripe | UK 1.5% + 20p standard, 2.8% + 20p premium; EEA 2.5% + 20p; international 3.15% + 20p | Bacs direct debit 1%, minimum 20p, capped £4 | Priced per product, so costs stack across invoicing and payments |
| Adfin | 1% + 20p; premium and EEA cards +1%, non-EEA +2% | 1% + 20p capped £4 for direct debit and bank payments | High value direct debit +0.15% on the amount above £2,000; no monthly fees, no minimum, no contract |
| Pricing accurate as of August 2026, sourced from provider websites. Custom pricing may vary. |
Three things are worth pulling out of that table. Bank debit clusters around 1% + 20p with a cap of about £4 across providers, so the headline number is rarely where the difference lies. Card rates diverge much more, especially once card type is taken into account. And the add-ons are where two quotes that look identical stop being identical: branding fees, failed collection charges, chargeback fees, high value uplifts.
What your bill depends on
Your effective rate is decided by three things you partly control, and the headline percentage is only one of them.
A capped fee and an uncapped percentage behave the same way at £50 and completely differently at £5,000, so invoice size is where most of the variation comes from. If your average invoice runs into the hundreds or thousands, moving contracted work onto bank debit changes your payment costs more than any renegotiation will. We've worked the arithmetic properly in a separate answer piece on whether direct debit or card is cheaper.
Method mix follows from that. Most businesses can't put everything on a mandate, and they don't need to: it's the recurring, contracted revenue that's worth moving, and cards can carry the one-offs and the first sales where the cost per payment matters less than getting paid at all.
Card type is the part you can't control but can price for. You have no way of knowing whether a payment is coming from a personal debit card or a company card until it lands, so if commercial cards are a real share of your volume, the choice is to absorb the difference or to surcharge those payments within the legal limit.
And the fees you never see on a rate card can outweigh the ones you do. Failed collection charges, chargeback fees and branding add-ons are all real money, and they're the part of a quote most people skim.
Common questions
What does it cost to take card payments in the UK? The Payment Systems Regulator put average merchant service charges at 2.76% to 2.78% for merchants with under £15,000 of annual card turnover, falling to 0.93% to 0.97% above £180,000. Those figures are from 2020 and are the only regulator numbers published.
What is a merchant service charge made up of? Three components. Interchange fees go to the bank that issued your customer's card. Scheme and processing fees go to Mastercard or Visa. The rest is your acquirer's own margin.
Are UK card fees capped? Only interchange is. It's capped at 0.2% of the transaction on consumer debit cards and 0.3% on consumer credit cards. Scheme fees and acquirer margin have no legal cap.
Why are business and commercial cards more expensive to accept? Commercial cards are excluded from the scope of the interchange caps, so the interchange behind them isn't limited. Providers pass that through as a higher rate on premium and commercial cards.
Have card fees been going up? Scheme and processing fees have. The PSR found Mastercard and Visa increased them by more than 30% in real terms over five years, having found increases of 80% and 115% between 2014 and 2018.
Is direct debit cheaper than taking cards? On small amounts the difference is pennies. Bank debit fees are capped at around £4 by most providers, so on invoices of several hundred pounds and up the gap widens quickly in direct debit's favour.
Sources
- legislation.gov.uk — Regulation (EU) 2015/751 on interchange fees (accurate as of August 2026)
This article explains how UK payment pricing works and is not financial advice. Provider pricing changes without notice and the regulator's figures date from 2020; check current pricing pages before relying on any number here. Last updated August 2026.
