Card machine fees explained: what you actually pay per transaction (2026 guide)
A card fee is never one number. It is a percentage, sometimes a fixed pence charge, sometimes a monthly rental, and a handful of smaller lines that appear on the statement rather than the quote. This guide takes each apart, shows the arithmetic on a real ticket size and gives you one way to compare quotes that cannot be gamed.
- Every line on a card statement, explained
- The arithmetic on a £6 and a £40 ticket
- Posso Pay from 1% + 10p, quoted on card turnover
Written by the Posso team in Leicester · Reviewed by Paul Robinson, Managing Director · Last reviewed
Short answer
UK card machine fees are built from up to five parts: a percentage of each sale, a fixed pence charge per transaction, a monthly terminal rental, a PCI compliance fee and the cost of waiting for settlement. Payment-led readers typically charge a flat 1.5–1.75% with no monthly fee; merchant accounts typically charge around 1–1.5% plus pence, with a rental. Which is cheaper depends entirely on your average sale: a fixed 10p is 1.7% of a £6 coffee and 0.25% of a £40 meal. Compare quotes by multiplying each structure against your own monthly transaction count and average ticket, not by the headline rate. Posso Pay is quoted on card turnover from 1% + 10p, the same rate in store and online.
Key takeaways
- A card fee has up to five parts; the headline percentage is usually the only one on the quote.
- Pence-per-transaction charges hit low tickets hardest: 10p is 1.7% of £6 but 0.25% of £40.
- Compare quotes on your real monthly card turnover and transaction count, never on the rate alone.
- An integrated terminal saves a reconciliation at close and removes mis-keyed amounts entirely.
Takeaway: Work out every quote as pounds per month on your own transactions, because the cheapest headline rate is often not the cheapest bill.
Why card fees are the cost most operators get wrong
Card fees are the only cost in a hospitality business that is quoted as a percentage, charged in pence, billed monthly and settled days later. An owner who knows the price of a case of lager to the penny will often not know what they paid for card acceptance last month, because it never arrived as one invoice.
The first mistake is comparing headline rates. A reader at 1.69% looks dearer than a merchant account at 1.2% plus 8p until you run both against a café doing 300 transactions a day at £6, where the pence charge adds more than the percentage saved. The second mistake is ignoring the monthly lines. A rental, a PCI fee and a minimum monthly charge can add more to a quiet January than the transaction fees themselves.
The third mistake is treating the card machine as separate from the till. An unintegrated terminal costs you a typed amount on every sale and a half-hour reconciliation at close, and neither appears on a statement. This guide takes the fee apart line by line, then puts it back together on two real ticket sizes. The card payments hub collects the related guides.
How a card fee is built
Six principles, each one line of the bill. Ask any provider which of these apply and what each one is.
The percentage is the only part that scales with your sale
The percentage rate is taken from every card sale, so it costs the same proportion whether the ticket is £6 or £60. A takeaway turning over £20,000 a month on card at 1.5% pays £300; at 1.2% it pays £240. It is the only part of the fee that scales, which is why providers lead with it. Ask whether the rate you are quoted is blended or whether business and premium cards cost more.
Pence per transaction punishes the small ticket
A fixed charge per transaction, 5p, 8p or 10p, is the same whether the customer buys a flat white or a family meal. On a £6 ticket, 10p is 1.67% on its own. On a £40 ticket it is 0.25%. A café doing 300 £6 sales a day pays £30 a day in pence charges alone before the percentage, which is £900 a month. A restaurant doing 80 covers at £40 pays £8 a day for the same 10p. If your average sale is under £10, negotiate the pence line first.
Monthly rental and minimums are paid on your quietest week too
Merchant-account terminals usually come with a monthly rental per device, and some agreements add a minimum monthly service charge: if your transaction fees fall below a set figure, you pay the set figure anyway. A seaside fish and chip shop doing a fifth of its summer turnover in February should ask what the bill is in that month.
PCI compliance is a fee until you prove you are compliant
PCI DSS is the card industry's security standard. Most merchant accounts charge a PCI fee, and many add a larger non-compliance fee if you do not complete an annual self-assessment questionnaire. The questionnaire is tedious but not difficult, and completing it on time removes the larger charge. Ask whether there is a PCI line, what it is, and what happens if you miss the questionnaire.
Authorisation and settlement timing have a cost even when they are free
Each tap is authorised in seconds, but the money settles later: next working day with some providers, two to three working days with others. A Friday and Saturday of card sales landing on Tuesday or Wednesday means two trading days of wages and stock paid from cash you have not yet received. A provider that settles next day at a slightly higher rate can be cheaper than an overdraft.
Interchange and scheme fees are where the rate comes from
Underneath every rate, two fixed costs are paid out by your provider: interchange, which goes to the customer's card-issuing bank and is capped by UK regulation for consumer debit and credit cards, and scheme fees, which go to Visa or Mastercard. Business and premium cards carry higher interchange. Your provider's margin sits on top of those two. That is why rates cannot fall to zero, why business cards cost more and why a quote on your actual card mix is more precise than a flat figure.
The same rate on a £6 ticket and a £40 ticket
Take two structures. A flat reader rate of 1.5% with no pence charge, and a turnover-quoted merchant rate of 1% + 10p. On a £6 coffee and pastry: 1.5% of £6 is 9p; 1% of £6 is 6p plus 10p is 16p, so the flat rate wins by 7p a transaction. On a £40 meal for two: 1.5% of £40 is 60p; 1% of £40 is 40p plus 10p is 50p, so the percentage-plus-pence structure wins by 10p a transaction.
The crossover is where the half-percent difference equals the 10p: 0.5% of a sale equals 10p at a £20 ticket. Below £20 the flat rate is cheaper per transaction; above it, the lower percentage with a pence charge is cheaper. A café at a £6 average and a restaurant at a £40 average should expect to be quoted differently. The reducing card processing fees guide takes the arithmetic further.
Then multiply by volume. The café doing 300 transactions a day at £6 pays £27 a day on the flat 1.5% and £48 a day on the 1% plus 10p structure: over a 26-day month, roughly £700 against £1,250. The restaurant doing 80 covers at £40 pays £48 a day flat and £40 a day on the merchant structure: £1,250 against £1,040 a month. Same two quotes, opposite winners.
Card fee structures compared
What each fee type typically looks like in the UK market, with Posso Pay's published position last.
| Structure | Typical UK range | Who it suits | Posso Pay |
|---|---|---|---|
| Payment-led reader, flat rate | 1.5–1.75% flat, no monthly fee | Low volume, small tickets, seasonal trade | — |
| Merchant account, percentage plus pence | Around 1–1.5% plus pence per transaction, with rental | Steady volume, tickets above £20 | From 1% + 10p, quoted on card turnover |
| Terminal rental | Monthly per device elsewhere | Fixed cost; weighs on quiet months | Quoted with the rate |
| PCI compliance | Annual or monthly fee elsewhere; higher if non-compliant | Everyone on a merchant account | Ask for the line in your quote |
| Online payments | Often a higher rate than in store | Anyone taking web or app orders | Same rate in store and online |
| Integration with the till | Varies; many readers unintegrated | Any counter doing more than a few dozen sales a day | Paired to the till; amount pushed, not typed |
Ranges are typical UK figures at October 2026; Posso prices are published on EPOS pricing.
What to ask a provider before you sign
What is my total monthly cost on my own transactions?
Hand over last month's figures: card turnover, number of transactions, split of debit and credit if you have it. Ask the provider to come back with a single figure in pounds for that month, including rental, PCI and any minimum. A quote expressed only as a rate has not been done on your business.
Is the rate blended, and what do business and premium cards cost?
A blended rate charges one figure across all cards. An unblended rate charges consumer debit at one level and business or premium cards at another, and the second can be noticeably higher. If a third of your customers pay on a company card, the blended figure is the honest one to compare. Ask which you are being quoted.
When does the money reach my account, and does the terminal talk to my till?
Settlement timing decides your cash flow over a weekend, and integration decides whether staff type the amount or the till sends it. Ask for both in writing. A terminal that settles next working day and takes the total from the till saves you a float problem and a nightly reconciliation; a cheap reader that settles in three days and needs the amount keyed costs you both, and neither appears on the rate card. The card machines page covers integrated terminals in more detail.
The Posso approach to card fees
Posso Pay is Posso's own merchant service, quoted on your card turnover from 1% + 10p. The quote is done on your real transaction mix rather than a printed rate, which is the method this guide recommends, and the same rate applies in store and online, so a web or app order through your own ordering site costs the same to process as a tap at the counter.
The terminal is paired to the till. The total is pushed from the order to the card machine, so nobody keys £24.85 and gets £42.85 on a busy Friday, and the order is marked paid when the terminal approves. At close, the till's card total and the Posso Pay settlement describe the same transactions, so the end-of-day check is a glance rather than a comparison of two printouts.
Posso also works with Teya and Dojo terminals where a site already has one, so you can keep an existing agreement running and move to Posso Pay when it ends if the quote is better. Support runs Monday to Friday, 9am–9:30pm from Leicester, with one number for the till and the terminal. A complete Posso system is £499 + VAT; bring your latest card statement and we will put a written Posso Pay quote next to it.
Where to look elsewhere
If you take a few dozen payments a day at a market stall, a pop-up or a mobile van, a payment-led reader on a flat rate with no monthly fee is usually the cheapest answer, because the fixed costs of a merchant account do not pay back at that volume.
If you already have a card agreement with a long term remaining and a termination fee, the right move may be to keep the terminal until the agreement ends, pair it to the till if it is a Teya or Dojo machine, and compare quotes at renewal.
Related guides
Related guides
How to reduce card processing fees
The levers that actually move the bill: ticket mix, pence charges, blended rates and integration.
Read the guideEPOS with Dojo
How a Dojo terminal pairs to the till, who should keep it and how to switch mid-contract.
Read the guideEPOS with Teya
Native Teya integration: amounts push from the basket and totals reconcile at close.
Read the guidePOS system with a card machine
What an integrated till and terminal bundle should include and what it costs in the UK.
Read the guideCard machines: what owners say
Community research on every major UK provider, with the warnings owners give each other.
Read the guideThis is one part of the Posso EPOS system — the same till, kitchen display, ordering and card payments, set up for your type of venue. Every one-off and monthly cost is on the EPOS pricing page.
Card machine fees — frequently asked questions
What are typical card machine fees in the UK?
Payment-led readers typically charge a flat 1.5–1.75% with no monthly fee. Merchant accounts typically charge around 1–1.5% plus a few pence per transaction, with a monthly terminal rental and often a PCI fee. Posso Pay is quoted on card turnover from 1% + 10p, the same rate in store and online. Which is cheapest depends on your average sale and monthly volume, not on the headline figure.
Why does a pence-per-transaction fee matter so much for a café?
Because it is the same charge on a £3 espresso as on a £40 meal. At 10p a transaction, a café doing 300 sales a day pays £30 a day, £900 a month, before any percentage is applied. On a £6 average sale, 10p is 1.67% on its own, which can double the effective rate. If your average ticket is under £10, negotiate the pence charge before the percentage.
What is interchange and why does it affect my rate?
Interchange is the fee your provider pays to the customer's card-issuing bank on every transaction; scheme fees are what Visa and Mastercard charge on top. UK regulation caps interchange on consumer debit and credit cards, but business and premium cards carry higher interchange, which is why a blended rate includes a margin for them. Your provider's own margin sits above these two costs, so rates cannot reach zero.
How do I compare card machine quotes properly?
Give each provider last month's card turnover and transaction count and ask for a total monthly cost in pounds, including rental, PCI and any minimum charge. Then check settlement timing and whether the terminal integrates with your till. Comparing the pound figures on your own numbers removes the headline-rate trick entirely, and a provider that will not give you a figure in pounds has not quoted your business.
How much does a card machine cost with an EPOS system?
A complete Posso system is £499 + VAT including the touchscreen terminal, kitchen printer, receipt printer, cash drawer, menu build and training, with software from £25 + VAT a month. Card processing through Posso Pay is quoted separately on your card turnover from 1% + 10p, and the terminal arrives paired to the till. Existing Teya and Dojo terminals can be paired instead.
What does an integrated card terminal actually save?
Two things that never appear on a statement. First, mis-keyed amounts: when staff type the total into a separate machine, a £24.85 sale becomes £42.85 often enough to matter. Second, the nightly reconciliation: with an integrated terminal the till's card total and the settlement match automatically, instead of someone comparing a Z report to a terminal printout at 11pm.
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