If you take card payments, processing fees are almost certainly one of your top five overheads — and one of the least scrutinised. Most business owners set up a card machine once, then never look at it again. Providers count on exactly that.
The good news: this is one of the easiest costs to cut. Here’s how to think about it.
Know what you actually pay
The headline rate a provider advertises is rarely the whole story. Your true cost is a blend of several charges:
- Transaction fees — a percentage of each sale, sometimes plus a few pence per transaction.
- Monthly terminal or service fees — a fixed charge whether you trade or not.
- Authorisation fees — tiny per-transaction costs that add up at volume.
- PCI compliance charges — often billed monthly, sometimes with penalties.
- Minimum monthly service charges — a floor you pay even in a quiet month.
A “1.69% flat rate” can work out far more expensive than a negotiated rate with a small monthly fee once you run the numbers at your real volume. That’s the calculation that matters.
Flat rate vs negotiated (interchange-plus)
Flat-rate providers are simple and fair for very low card volumes. But as your takings grow, negotiated “interchange-plus” pricing usually wins, because you pay the true cost of the card scheme plus a transparent margin — rather than a one-size-fits-all percentage.
Somewhere around £3,000–£5,000 a month in card sales is where many businesses start overpaying on flat rates without realising it.
Watch the contract, not just the rate
A great rate inside a four-year contract with a punishing exit fee is not a great deal. Before signing anything, check:
- The contract length and notice period
- Any early termination or exit fees
- Whether it auto-renews, and how far ahead you must cancel
- Whether the terminal is rented, and for how long
How to switch without the headache
- Gather three months of statements so you know your real volume and blended rate.
- Compare the total annual cost across providers — not the headline percentage.
- Check your current exit terms before you commit.
- Line up the switch so your new terminal is ready before the old one goes.
Done properly, switching takes a day and there’s no gap in your ability to take payments.
Where HappyBiz fits
We do the maths for you at your real card volume, compare a vetted panel of UK acquirers, and show our working line by line. If staying put is genuinely your best option, we’ll tell you. If it isn’t, we’ll handle the switch. Either way, the review is free.
