How to Reduce Payment Fees When You're Turning Over £1M+ Per Month

How to Reduce Card Processing Fees: A Guide for High-Turnover Businesses 

Card processing fees are a hidden cost that can quietly erode margins, especially if you’re processing millions per month. In 2023 alone, UK businesses paid over £1.3 billion in card processing charges, with fees per transaction rising steadily. Yet for high-turnover merchants, many of these costs are negotiable or avoidable.

This guide is designed specifically for large enterprises and high-volume merchants who want to reduce processing costs, streamline operations, and take control of their payment strategy.

Why Are Card Processing Fees So High?

In 2023, the average card processing fee in the UK climbed to around £0.09 per transaction, up from £0.055 in 2016. While interchange and scheme fees are non-negotiable, markups from acquirers and other third parties are often inflated, especially for merchants who haven’t reviewed their rates in years.

Debit and credit cards (including digital wallets) accounted for over 88% of in-person and 85% of ecommercetransactions in the UK in 2023. That means optimising card processing fees can lead to significant savings—especially at enterprise scale.

Types of Fees You Might Be Paying

Card processing costs are typically made up of:

• Merchant Service Charges (MSC) – includes interchange fees, scheme fees, and acquirer markup.
• Gateway fees – for hosted, embedded, or API-based integrations.
• Authorisation fees
• PCI compliance charges
• Chargeback management fees
• Minimum Monthly Service Charges (MMSC)

Other variables include card type (debit, credit, commercial), customer location, payment method (in-person vs online), and your transaction volume and value.

For high-turnover businesses, even a 0.05% reduction in markup can lead to six-figure annual savings.

12 Proven Ways to Reduce Card Processing Fees

1. Use Your Turnover to Negotiate Lower Fees

If you're processing £1 million+ per month, you're a high-value client. Providers are more likely to offer reduced acquirer markups, eliminate fixed monthly charges, and customise your service package.

Use your:

• Transaction volume and growth trajectory
• Low chargeback ratio
• Multi-service use (e.g. fraud tools, POS, reporting)
• Competing offers from other providers

to secure better pricing. The higher your turnover, the more negotiating power you have.

2. Streamline Payments Through Back-Office Integration

At enterprise scale, operational inefficiencies can quietly drain profits. Integrating your payment platform with back-office systems (ERP, CRM, inventory and accounting) can:

• Automate reconciliation
• Reduce human error
• Improve visibility and forecasting

This doesn’t just save labour costs—it also helps spot hidden or excessive fees and simplifies audits.

3. Avoid Unnecessary Intermediaries

Some providers act as resellers, adding unnecessary markups without delivering added value. If you're using an intermediary, consider going direct to the acquirer to simplify costs, improve support, and gain access to tailored pricing.

4. Implement a Multi-Acquirer Strategy

Large or international businesses benefit from payment orchestration—routing each transaction to the most cost-effective or reliable acquirer. This lowers:

• Cross-border fees
• Decline rates
• Operational risk

Modern orchestration tools make it easy to implement a multi-acquirer model via API or gateway.

5. Route Payments Locally

Cross-border transactions often trigger higher interchange, FX, and scheme fees. Instead, route payments through local acquiring partners and domestic card schemes.

For example, offering local options in key markets can reduce costs and improve authorisation rates. Domestic routing is often 20–40% cheaper than cross-border equivalents.

6. Offer Lower-Cost Payment Methods

Account-to-account (A2A) payments via Open Banking cost a fraction of card processing (as low as a few pence per transaction).

Benefits of A2A include:

• Lower fraud risk
• Faster settlement
• Reduced chargebacks

Encouraging customers to use A2A payments, or including them alongside cards, can dramatically reduce fees for high-value transactions.

7. Reduce Fraud and Chargebacks

Fewer chargebacks and fraud incidents = lower risk profile = better fees.

You can reduce chargebacks by:

• Using strong verification tools (e.g. 3DS2)
• Writing clear refund policies
• Deploying AI-driven fraud detection

Fewer disputes also protect your margins and keep you eligible for the best processing rates.

8. Use Batch Processing for Small-Value Transactions

If you're handling frequent, low-value transactions, batch settlement can reduce per-transaction costs. Instead of being charged for each transaction, batches incur a single fee. Ask your provider if they support this.

9. Double-Check Your Merchant Category Code (MCC)

An incorrect MCC can unfairly categorise your business as high-risk, resulting in much higher fees.

For example, being misclassified as a travel agency (high risk) instead of a travel accessory retailer (low risk) could cost tens of thousands per year. Request a reassessment if your code seems off.

10. Use Tokenisation to Improve Security and Savings

Tokenising card details improves authorisation rates and reduces PCI compliance scope—often leading to lower fees. It’s also beneficial for recurring billing and can cut down on false declines.

11. Switch from Fixed to Transparent Pricing

Fixed-rate platforms may be convenient, but they’re expensive. Large businesses should opt for Interchange Plus (IC+) or Interchange++ (IC++) pricing models for maximum transparency.

These models let you clearly see where your money is going and create leverage for negotiations.

12. Settle Transactions Quickly

The longer you hold unsettled payments, the higher the risk—and the higher the fee. Settle transactions daily to minimise exposure and benefit from lower risk-adjusted pricing.

How a £3.5M/Month Retailer Saved £140K a Year on Card Processing

Business profile:

• UK-based retailer with ecommerce and physical stores
• Processing £3.5 million per month in card payments
• Volume split: 60% debit, 35% credit, 5% commercial/international cards
• Original pricing: Blended rate of 1.65%

Initial cost:

£3.5M x 1.65% = £57,750 per month

Annual total: £693,000

Actions taken:

1. Switched from blended pricing to Interchange++ (IC++), revealing true interchange and scheme costs.
2. Negotiated acquirer markup down by 0.25% (from approximately 0.45% to 0.20%) based on transaction volume and low chargeback rates.
3. Implemented local acquiring in the EU, reducing cross-border processing charges.
4. Integrated payment data into their ERP system, eliminating manual reconciliation and improving accuracy.
5. Reduced chargebacks by 30% through clear refund policies and the addition of enhanced fraud prevention tools.

New monthly cost:

IC++ effective average rate: 1.32%

£3.5M x 1.32% = £46,200 per month

Annual total: £554,400

Annual Savings Breakdown:

Find the Right Provider with The Payments Directory®

High-turnover businesses can’t afford trial and error when choosing a payment processor. The Payments Directory® helps you:

• Filter by merchant category code (MCC) to ensure accurate classification and risk assessment
• Match with providers that support multi-country operations and domestic routing
• Compare integration options with your current stack (ERP, accounting, CRM)
• View providers by turnover tier, so you’re only shown platforms suitable for high-volume processing

This helps eliminate costly mismatches and accelerates your optimisation process.

Wrapping It Up

For high-turnover merchants, card processing fees are not a fixed cost—they're a variable you can control. With the right provider, strategy, and tools, you can reduce fees significantly, improve operational efficiency, and boost your bottom line.

Want help reviewing your setup or comparing providers? Start with a free merchant statement audit or search The Payments Directory® to find the perfect match for your size, sector, and systems.