Short answer
UK card machine fees come from three layers: the terminal, the fixed monthly charges and the fees on each payment. The cheapest card machine depends on your monthly turnover and average sale. Pay-as-you-go readers usually win for small or seasonal sales, while merchant accounts with lower percentage rates win once turnover grows.
Part of Fees and rules by country. See the guides for every market we cover.
Key takeaways
- There is no single cheapest card machine, because the answer changes with turnover and average sale.
- Pay-as-you-go readers have no monthly fee and a higher percentage, so they suit small and seasonal businesses.
- Merchant accounts have lower percentages with monthly fees and often a contract, so they suit steadier turnover.
- Surcharging consumer cards is banned in the UK, so the cost cannot be passed on as a card fee.
- Compare quotes on the all-in effective rate for your own last month, including exit costs.
Search for "cheapest card machine" and you will find dozens of comparison pages, each with a different winner. They are not all wrong. They are answering slightly different questions, because the cheapest card machine for a market stall is not the cheapest for a restaurant.
This guide explains how UK card machine fees are built, sets out the three kinds of provider you can choose from, shows how the answer changes as turnover grows and gives you a checklist for comparing offers. Prices change often, so it focuses on method rather than quoting rates that would be out of date within months.
What are the three layers of UK card fees?
Every UK card setup has the same three layers of cost.
- The terminalBought, rented, leased or a low-cost reader. See the guide to card machine costs.
- Fixed monthly chargesRental, gateway, PCI, statement and any minimum monthly charge.
- Fees on each paymentA percentage, a per-transaction fee, or both.
The same three layers apply to every provider. Offers differ in how they trade one against another.
Under the surface, each card payment also carries interchange (paid to the customer's bank) and scheme fees (paid to the card network). Domestic consumer debit and credit interchange is capped in the UK at 0.2% and 0.3%. How those costs reach you depends on the pricing model. See interchange fees explained and interchange plus, blended and flat rate.
What are the three types of UK provider?
| Type | How it charges | Contract | Best suited to |
|---|---|---|---|
| Pay-as-you-go reader provider | One flat percentage per payment, sometimes with a fixed fee | Usually none | Small, new or seasonal businesses |
| Payment service provider with a terminal | A rate (often blended) plus a monthly terminal fee | Often 12 months or more | Steady small to medium businesses |
| Traditional merchant account (acquirer or reseller) | Interchange plus or blended, with fixed fees | Often 12 to 36 months, with exit fees | Higher turnover, mixed card types |
The same company may offer more than one type. The names above describe the pricing structure, not the brand.
How does the cheapest option change with turnover?
To see why there is no single winner, compare three illustrative offers across a range of monthly turnovers. The business has an average sale of £20. The figures are examples, not quotes.
- Offer P (pay-as-you-go): 1.50% on every payment, no monthly fee, no contract.
- Offer M (blended with a monthly fee): 1.20% plus £15.00 a month.
- Offer I (interchange plus): 0.85% plus 4p per payment (0.20% at a £20 average sale, so 1.05% in total) plus £25.00 a month.
- Pay-as-you-go
- Blended plus monthly fee
- Interchange plus
View the data as a table
| Pay-as-you-go | Blended plus monthly fee | Interchange plus | |
|---|---|---|---|
| £2,000 | 1.50% | 1.95% | 2.30% |
| £5,000 | 1.50% | 1.50% | 1.55% |
| £10,000 | 1.50% | 1.35% | 1.30% |
| £25,000 | 1.50% | 1.26% | 1.15% |
| £50,000 | 1.50% | 1.23% | 1.10% |
Average sale £20. Illustrative offers. The cheapest option changes as turnover grows.
Reading the chart:
- Below about £5,000 a month: the pay-as-you-go offer is cheapest, because it has no fixed fee.
- Around £5,000 to £6,700: the blended offer is cheapest, because its fixed fee is small and its percentage is lower.
- Above about £6,700: interchange plus is cheapest, and the gap widens as turnover grows.
At £50,000 a month, interchange plus costs about 1.10% against 1.50% for pay-as-you-go, a difference of £200 a month, or £2,400 a year. At £2,000 a month, the position reverses: interchange plus costs 2.30%, against 1.50%. Our guide to the flat rate versus interchange plus break-even shows how to find the crossover for your own quotes.
Which fees should you look for?
When you compare offers, make sure each one shows every item in the table.
| Fee | What to check |
|---|---|
| Percentage rate | For which cards, and whether it differs for debit, credit and commercial cards |
| Per-transaction fee | Charged on every payment, or only successful ones |
| Terminal cost | Bought, rented or leased, and the monthly amount |
| Monthly fees | Gateway, PCI, statement, SIM and minimum charge |
| Contract term | Minimum term, renewal and notice period |
| Exit cost | Early termination fee and terminal return charge |
| Settlement time | How quickly money reaches your bank |
| Extras | Refund fees, chargeback fees and fees for American Express or international cards |
Our guides to hidden fees and monthly fees on a card machine bill explain where extra costs hide.
Which UK rules affect your costs?
No surcharging on consumer cards
Since 13 January 2018, UK businesses cannot add a surcharge to consumer debit or credit card payments, and the ban was extended to other retail payment methods such as PayPal. Commercial cards are treated differently, and any surcharge on them must not exceed the cost of processing. A flat fee that applies to every payment method, such as a delivery fee, is allowed. See our guide to surcharging, cash discounts and dual pricing. This means the cost of cards has to be absorbed or built into your prices.
Interchange caps and cross-border payments
UK domestic consumer card interchange is capped at 0.2% for debit and 0.3% for credit. Card-not-present payments between the UK and the EEA sit outside those caps at higher rates, a point the Payment Systems Regulator has been reviewing. If you sell online to EEA customers, this matters. See UK interchange caps and the PSR review.
Contract length
Card machine contracts in the UK commonly run for 12 months or more, with notice periods and exit fees that vary by provider. One comparison guide says that card machine contracts can no longer be longer than 18 months, but we could not verify that against a primary source, so check your own agreement. See contract length, auto-renewal and notice periods.
Which should you choose?
A short decision path:
- Work out your monthly card turnover and average sale from your last three months.
- Add up your current all-in cost and your effective rate. See effective rate explained.
- Get at least two written quotes against your own figures.
- Compare the all-in effective rate and the contract terms together.
- Check the exit cost and the notice period before you sign.
- Test the offer in your quietest month. Fixed fees can turn a saving into a cost.
Some rules of thumb, which are guides and not guarantees:
- Starting out or very seasonal: a pay-as-you-go reader with no contract keeps risk low.
- Steady turnover of a few thousand pounds a month: a blended offer with a modest monthly fee is worth a quote.
- Higher turnover with mostly UK debit cards: interchange plus tends to win.
- Lots of small sales: watch per-transaction fees, which weigh heavily on small payments.
What mistakes do UK businesses make?
- Choosing on the terminal price. A cheap or free terminal can come with a higher rate and a long contract.
- Forgetting the separate terminal contract. See double contracts.
- Ignoring how much they take. A rate quoted for a different turnover is not your rate.
- Missing the notice window. It can lock you in for another term.
- Not checking after switching. The first statements should match the quote.
For consultants
UK merchants often arrive with a bill, a contract and a vague sense that they are paying too much. Start with the effective rate and the terminal arrangement, then show the choice across turnover with a simple chart like the one above, so they can see where they sit. The checkmyrates calculator is set up for GBP statements with the UK card types, and produces a quote the merchant can read in one sitting.
Frequently asked questions
What is the cheapest card machine in the UK?
It depends on your turnover and average sale. Pay-as-you-go readers are usually cheapest for small or seasonal sales, and merchant accounts with lower percentages win as turnover grows. Compare the all-in effective rate on your own figures.
How much are card machine fees in the UK?
Fees vary by provider and pricing model. Rather than relying on a typical rate, add up the percentage, per-transaction and monthly fees on a quote and divide by your monthly turnover.
Can I charge customers extra for paying by card in the UK?
Not on consumer debit or credit cards. The surcharging ban has applied since 13 January 2018. Commercial cards are treated differently.
Do I need a contract for a card machine?
Not always. Pay-as-you-go readers often have none, while many merchant accounts and rented terminals have a minimum term.
Is it cheaper to buy or rent a card machine?
Buying usually costs less over more than a year or two, if the terminal is not locked to one provider. Renting costs less upfront. See card machine rental versus buying.
How do I compare card machine providers?
Ask each for a quote on your own statement, then compare the all-in effective rate, the contract term and the exit cost.
Sources and further reading
- UK interchange fees explained (MerchantHQ) (opens in a new tab)
- Card machine charges and fees explained (Mobile Transaction) (opens in a new tab)
- Ban on surcharging for card payments (Osborne Clarke) (opens in a new tab)
- Card machine rental in the UK: costs, hidden fees and when to buy (ExpertSure) (opens in a new tab)
- Payment Systems Regulator (UK) (opens in a new tab)
- Financial Conduct Authority (UK) (opens in a new tab)
- Competition and Markets Authority (UK) (opens in a new tab)
Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.