Understand what you pay, then compare it properly
Here is a question most business owners cannot answer off the top of their head: what percentage of your card takings disappears in fees? We help you find out.
Card payment solutions for UK businesses
Here is a question most business owners cannot answer off the top of their head: what percentage of your card takings disappears in fees? Not the rate on the sales sheet from two years ago, the real one, after terminal rental and the charges nobody explained. If you are not sure, you are in the majority, and that uncertainty is exactly what good card payment solutions in the UK are meant to fix.
This page explains how card payment services actually work, the setups available, and what you really pay. EposCloud is an independent review and introduction service. We look at your current rates and setup, then introduce options from the providers we work with. Each provider sets its own prices and terms, and there is no obligation to switch.
How card payment services work in the UK
When a customer taps their card, four parties are involved in the few seconds before the payment clears. Knowing who they are makes your statement far easier to read:
- 1The customer’s bank (the issuer) issues the card and authorises the payment.
- 2The card scheme (Visa, Mastercard and others) runs the network the payment travels on.
- 3Your provider (the acquirer) moves the money to your account and charges you for the service.
- 4You, the business, pay the combined cost, which is your merchant service charge.
That merchant service charge has three layers inside it. The interchange fee goes to the customer’s bank and is capped in the UK at 0.2 per cent for consumer debit and 0.3 per cent for consumer credit cards, as the Payment Systems Regulator explains. Scheme fees go to Visa or Mastercard. The last layer is your provider’s own margin, and that is the part you can actually negotiate. Business and non-UK cards are not capped, which is one reason a headline rate rarely matches your real one.
Card payment systems explained
The right card payment system depends on where and how your customers pay. Most businesses use more than one. Here is the range we can arrange:
| Setup | What it is | Suits |
|---|---|---|
| Countertop terminal | A fixed card terminal at the till, usually connected by cable or Wi-Fi. | Shops and counters with a fixed point of sale |
| Portable terminal | A terminal that moves around the premises on Wi-Fi or mobile data. | Restaurants and venues that take payment at the table |
| Mobile card reader | A small reader paired with a phone or tablet, often pay-as-you-go. | Market traders, mobile services, low-volume sellers |
| Pay at table | Handhelds that take the order and the payment together. | Table service, where speed and bill splitting matter |
| Online and pay-by-link | A checkout, gateway or payment link for invoices, deposits and bookings. | E-commerce, service businesses, deposits ahead of a booking |
You are not locked into one. A café might run a countertop terminal and a mobile reader for the Saturday market stall. A salon might take a deposit by pay-by-link and the balance at the counter. The point of a review is to match the mix to how you trade, rather than paying for setups you do not use.
What you really pay: blended and interchange-plus pricing
Two pricing models dominate the UK market, and the difference between them can be worth hundreds of pounds a year.
Blended pricing
Charges one flat rate on every sale, whatever the card. It is simple to read and common for smaller businesses, and pay-as-you-go readers typically sit around 1.69 to 1.75 per cent. The trade-off is that cheap debit cards subsidise expensive ones, so a debit-heavy business can overpay.
Interchange-plus pricing
Passes through the actual interchange and scheme fee on each sale, then adds a fixed provider margin shown separately. The statement is busier, but you keep the benefit of low-cost debit cards. As a rough guide, once card turnover passes somewhere around £8,000 to £25,000 a month and your mix is mostly UK debit, interchange-plus usually beats a blended rate. These are market observations, not a quote.
Two mistakes cost UK merchants the most: accepting a blended quote without asking for an interchange-plus alternative, and never working out their effective rate. Watch the add-ons too, because PCI fees, minimum monthly charges, authorisation fees and gateway fees can outweigh a small difference in the headline rate.
Work out your effective rate first
Your effective rate is everything you pay to accept cards in a month, divided by the amount you took on cards. It is the only figure that lets you compare two providers fairly, and your latest merchant statement has both numbers on it.
Say a shop takes £12,000 a month on cards and pays £204 in total charges, including terminal rental. That is an effective rate of 1.7 per cent. A quote at 1.4 per cent would be £168, a saving of £36 a month or £432 a year. Those are illustrative figures, not a promise, and your own result depends on your card mix, terminals and contract.
Enter a few figures from your latest merchant statement to see an estimate of what your card payments currently cost your business.
Card terminal for small business: what to look for
A card payment terminal is a long-term commitment, so the features that matter are the ones you live with every day, not the ones in the brochure:
- ✓Settlement speed: How quickly your takings reach your bank. Next-day settlement helps cash flow; some providers are slower, which can squeeze a tight week.
- ✓Contract and rental: Is the terminal rented on a separate agreement, and what is the term? Terminal rental is a frequent hidden cost, and early termination fees can run from a couple of hundred pounds upwards.
- ✓Connectivity: Wi-Fi, mobile data or cable. A terminal that drops its connection at the counter costs you sales.
- ✓Support: When something fails mid-service, who do you call, and when are they available?
A card terminal for a small business should be judged on the whole package, not the per-transaction rate alone. Ask for the all-in monthly cost, the contract length and the exit terms in writing before you sign.
Standalone terminal or integrated card payment system?
A standalone terminal takes the payment on its own, and your staff key the amount in by hand. An integrated card payment system connects the terminal to your till or EPOS, so the amount passes across automatically and the till and the card takings reconcile themselves at close of day.
Integration removes the double-keying that causes most end-of-day mismatches, and it is usually the single biggest time saver in a busy venue. It does need a terminal that is compatible with your EPOS, so check that before buying either. If your terminal already works well and the rate is the only problem, a better rate on your current setup may be the smarter move, and we will tell you so. Our EPOS systems page covers the till side in full.
A note on surcharging and the law
One rule is worth stating plainly, because it still trips businesses up. Since 13 January 2018, under the Payment Services Regulations 2017, UK businesses cannot add a surcharge for paying by a consumer debit or credit card, as the government’s Business Companion guidance sets out. Commercial cards are the exception. So the answer to card fees is not to pass them to the customer; it is to make sure you are not overpaying in the first place. This is general information, not legal advice.
Business payment solutions by sector
How you take payment changes with your trade. These pages cover the card and EPOS setups that suit each one.
Retail
Fast checkout and returns for shops.
Restaurants
Pay at table, tips and split bills.
Takeaways
Quick counter and delivery payments.
Cafés
Small baskets where the fixed fee bites hardest.
Pubs and bars
Fast rounds and open tabs.
Salons and beauty
Deposits and in-salon payments.
Business technology without the runaround.
Instead of speaking separately to payment companies, EPOS companies and funding providers, you get one conversation and one contact who understands the whole picture.
One point of contact
Talk to one person about payments, EPOS and funding.
Solutions built around you
We start with how your business actually operates.
Straightforward comparison
Understand your existing setup before making a decision.
Support beyond sign-up
We stay in touch instead of disappearing after the introduction.
Card payment questions
It depends on how much you take and how your customers pay. A simple pay-as-you-go card reader with no monthly fee suits very low volumes, because you only pay a flat percentage per sale. As card turnover grows, a merchant account on interchange-plus pricing often works out cheaper, because you stop paying one averaged rate on cheap debit cards. The only reliable way to know is to work out your effective rate and compare it against a quote, which is what a review does.
Your effective rate is the total you pay to accept cards in a month, divided by the amount you took on cards, shown as a percentage. For example, £180 of charges on £12,000 of card sales is an effective rate of 1.5 per cent. It captures everything, including terminal rental and scheme fees, which a headline rate does not. Your latest merchant statement has both figures.
Not always. Pay-as-you-go providers bundle the merchant account into the service, so you can start taking payments quickly with one agreement. A dedicated merchant account, paired with a separate processing agreement, usually gives you interchange-plus pricing and can be cheaper at higher volumes, but it is more to set up and reconcile. Which suits you depends on your turnover and how much transparency you want.
A standalone card terminal takes the payment on its own, and your staff key the amount in by hand. An integrated card payment system connects the terminal to your till or EPOS, so the amount passes across automatically and the two reconcile at close of day. Integration saves time and cuts keying errors, but the terminal has to be compatible with your EPOS, so check before you buy either.
It should not, if the changeover is planned around how you trade. In most cases the new provider handles installation and you keep your existing setup live until the new one is confirmed working. Before you switch, check your current contract for its end date, notice period and any early termination fee, because those are where the real cost of switching usually sits.
See what you should be paying
Send a recent statement or book a short call — we'll come back with clear figures on what you pay now and what the options are.
No obligation • Straightforward advice • UK business support