What your card statement actually charges you
Most business owners can name one percentage. A merchant statement usually contains five or six separate charges. Here is how to read one.
Ask a business owner what they pay to take card payments and most will give you a single number. That number is almost always the headline transaction rate, and it is almost never the whole cost.
The rate everybody quotes
This is the percentage taken from each sale. It is the figure on the front of any offer, and it is genuine. It is simply not the only line on the bill.
The rate nobody mentions
Most pricing separates card types. A standard consumer debit card is usually the cheapest thing you can take. A business card, a corporate card or a card issued outside the UK frequently costs several times more.
This matters enormously depending on who your customers are. A cafe serving the public may almost never see a corporate card. A supplier invoicing other businesses may see them constantly, and will be paying a rate they were never quoted.
Terminal rental
The machine itself is usually rented rather than bought, on a separate agreement with its own term. Over three years the rental frequently costs more than people expect, and it often runs on a different renewal date from the processing agreement, which is how businesses end up locked into one while trying to leave the other.
Worth checking: when does the rental end, and what happens if you do not cancel it.
Authorisation fees
A small fixed fee charged per transaction regardless of value. A few pence sounds like nothing. On a business taking a hundred small payments a day it is not nothing, and it hurts low value sales disproportionately. If your average transaction is four pounds, a fixed fee per authorisation is a far bigger deal than the headline percentage.
Minimum monthly service charge
If your processing fees do not reach an agreed figure in a month, the difference is charged anyway. Quiet January, same bill.
PCI compliance
A monthly charge relating to card data security standards, sometimes with a further non compliance fee if paperwork has not been completed. Many businesses pay the non compliance version for years without knowing there was a form to fill in.
What to do with this
Find a recent statement and look for each of the above. The exercise usually takes ten minutes and it is the only way to know your real cost. The single number on the front of the agreement will not tell you.
If you would rather have someone read it with you, that is what we do, and it costs you nothing because the provider pays us.
Want us to look at your own numbers?
Tell us how to reach you and we will come back with what is actually available for a business like yours. We are paid by the provider, not by you, so this costs you nothing either way.
- We read your current statement and explain it in plain terms
- No obligation, and no pressure to move if you are already well placed
- One conversation, not a sequence of calls
Prefer to work it out yourself first? Use the card fee calculator, or check whether finance is worth exploring.
