How Card Machine Fees Work UK 2026: Complete Breakdown
Understand every charge on your card processing statement. Interchange fees, scheme fees, merchant service charges explained with real examples.
The 4 Components of Card Processing Fees
Every card transaction in the UK involves 4 separate charges:
Fee Breakdown - £100 Transaction
- 1. Interchange Fee: £0.20 (paid to customer's bank) - SET BY VISA/MASTERCARD
- 2. Scheme Fee: £0.08 (paid to Visa/Mastercard) - SET BY CARD SCHEMES
- 3. Merchant Service Charge: £0.50-£1.50 (paid to your provider) - NEGOTIABLE
- 4. Monthly/Terminal Fee: £0-£25/month - VARIES BY PROVIDER
Total cost on £100 sale: £0.78-£1.78 (0.78-1.78%)
1. Interchange Fees (Fixed by Law)
Interchange fees are capped in the UK following EU regulations (retained post-Brexit):
| Card Type | Interchange Fee | £100 Transaction |
|---|---|---|
| UK Debit Card | 0.2% | £0.20 |
| UK Credit Card | 0.3% | £0.30 |
| EU Debit Card | 0.2% | £0.20 |
| EU Credit Card | 0.3% | £0.30 |
| Non-EU Cards | Uncapped | £1.50-£3.00 |
| American Express | 1.5-3.5% | £1.50-£3.50 |
Key point: You pay the SAME interchange whether you use Dojo, Square, or Worldpay. This part is non-negotiable.
2. Scheme Fees (Card Networks)
Visa and Mastercard charge scheme fees typically:
- Visa: 0.06-0.10% (£0.06-£0.10 per £100)
- Mastercard: 0.07-0.12% (£0.07-£0.12 per £100)
Again, identical across all providers. Non-negotiable.
3. Merchant Service Charge (Where You Can Save)
This is your provider's markup - the ONLY negotiable part:
- Low-cost providers: 0.5-0.8% (negotiated high-volume deals, e.g. Worldpay or a Dojo custom quote)
- Mid-range: 0.9-1.2% (most providers)
- High-cost: 1.3-2.0% (traditional banks)
This is where comparing providers saves money. A 0.5% difference on £20,000 monthly sales = £100/month = £1,200 annually.
4. Monthly & Other Fees
Additional charges vary by provider:
- Monthly service fee: £0-£40 (Dojo's Essential plan is free and Plus is £11.99/month per location for new customers, Worldpay £20-£30)
- Terminal rental: £0-£25 (free on contract or buy outright)
- PCI compliance: £0-£10 (usually included now)
- Chargeback fee: £15-£25 per dispute
- Refund fee: £0 (most providers don't charge)
Real Cost Examples
Small Cafe (£8,000/month, £4.50 average, 1,778 transactions)
Dojo (blended rate, under £100k/year)
- • Blended rate: 1.2% of £8,000 = £96.00
- • Terminal: bought upfront from £149 (£0 via MerchantSwitch)
- • Not included: Dojo’s fees schedule also lists a secure transaction fee, a refund fee and a minimum monthly payment, each set by your agreed plan; the amounts are not published
- • Total: £96.00/month (a 1.2% effective rate) Yes
Square (1.75%)
- • All-in rate: 1.75%
- • Total: £140/month
- • (Square absorbs interchange + scheme internally)
Dojo's blended rate works out at 1.2% effective at this volume, £44.00 a month under Square's 1.75% flat
How to Reduce Card Processing Fees
- Negotiate merchant service charge: If processing £15,000+, push for lower %
- Encourage debit over credit: Debit interchange 0.2% vs 0.3% credit
- Avoid American Express: 2-3% higher fees than Visa/Mastercard
- Eliminate monthly fees: Choose Dojo (£0) or Square (£0) over £20-£30 providers
- Minimise chargebacks: Each costs £15-£25
- Choose right provider for your volume: Total cost optimisation
Conclusion
Total card processing costs: 0.78-2.5% of transaction value depending on provider and card type.
Biggest savings opportunity: The merchant service charge (your provider's markup). Comparing providers can reduce this from 1.5% to 0.6% - saving £900 annually on just £10,000 monthly sales.
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