Written or reviewed by Libby James, founder of Merchant Advice Service and specialist in merchant payments and complex provider requirements.
Tell us about your business, current payment setup and what you're looking to change. We'll use it to understand your requirements before identifying providers that may be suitable.
Two card-processing quotations can look as though they are priced in completely different languages.
One provider might offer:
0.65% plus 5p per transaction
Another might quote:
Interchange plus 0.30% and 3p
A third might offer:
1.1% with no monthly fee
The lowest headline percentage is not automatically the least expensive option.
The final cost can depend on:
A quote based mainly on UK consumer debit cards could look extremely competitive but become considerably more expensive if the business receives a high proportion of:
The correct comparison is not:
Which provider has the lowest advertised rate?
It is:
What would each provider have charged for the same representative set of transactions, services and contractual requirements?
This guide explains how to compare UK card-processing quotes on a like-for-like basis and calculate which arrangement is likely to produce the best overall payment outcome.
To compare card-processing quotes properly:
The Payment Systems Regulator found that merchants can find card-acquiring prices difficult to compare and that many businesses could achieve a better deal by shopping around, switching or negotiating with their existing provider. Its findings applied particularly to merchants with annual card turnover below £50 million.
A provider cannot produce a reliable quotation from monthly turnover alone.
Consider two businesses that each process:
£500,000 per month
Their turnover is identical.
Their likely transaction costs, fixed fees, underwriting requirements and settlement arrangements could be very different.
Before requesting quotations, gather at least three representative months of payment data. Twelve months may be more appropriate for a seasonal or rapidly changing business.
Provide each potential payment provider with the same information.
A provider pricing only from:
£500,000 monthly turnover
is making assumptions about the remaining information.
Those assumptions may not match the actual business.
A comparison becomes unreliable where:
The providers are not pricing the same business.
Create one information pack and send the same version to every provider being seriously considered.
Record any additional assumptions each provider makes.
Complete this table for every serious offer.
| Cost or term | Current provider | Provider A | Provider B |
|---|---|---|---|
| UK consumer debit | |||
| UK consumer credit | |||
| Commercial cards | |||
| International cards | |||
| American Express | |||
| Fixed transaction fee | |||
| Authorisation charge | |||
| Declined authorisation charge | |||
| Gateway transaction fee | |||
| Monthly gateway fee | |||
| Monthly account fee | |||
| Minimum monthly charge | |||
| PCI administration fee | |||
| Refund fee | |||
| Chargeback fee | |||
| Retrieval fee | |||
| Terminal rental | |||
| Additional terminal charge | |||
| International-card fee | |||
| Cross-border fee | |||
| Currency-conversion margin | |||
| Settlement fee | |||
| Normal settlement | |||
| Rolling reserve | |||
| Reserve holding period | |||
| Contract length | |||
| Notice period | |||
| Early termination cost | |||
| Setup and integration | |||
| Optional services | |||
| Estimated monthly cost | |||
| Estimated annual cost |
Do not mark a field as:
Included
without confirming what it is included within.
For example, a provider may say that scheme fees are included in the quoted rate while another passes them through separately.
Before comparing prices, establish what each provider is actually supplying.
A quotation might cover:
The merchant account and card processing, but not the gateway or terminal.
Online processing and gateway technology combined.
This could include:
One combined price may include payment acceptance, onboarding, gateway and settlement.
A card-present quotation may include terminal rental, connectivity and maintenance.
Comparing an acquiring-only quote with a complete gateway package will produce a misleading result unless the excluded services are added separately.
Ask the provider to define the quotation precisely.
For example:
0.75% plus 5p
Could mean:
Ask:
A blended quote combines several underlying costs into one or a small number of merchant rates.
An IC+ quotation generally presents:
Interchange + provider markup
An IC++ quotation generally separates:
Suppose a merchant receives:
Blended rate: 1.05% + 5p
Interchange + 0.25% + 4p
Provider B’s 0.25% is not the merchant’s complete transaction cost.
Interchange and potentially scheme fees must still be included.
The only reliable comparison is to reprice the same transaction data under both models.
For a more detailed explanation, see the MAS guide to merchant account fees.
Do not accept only:
We expect to save you 0.20%.
Ask for:
The provider should be able to explain how the estimated saving was calculated.
Suppose a business processes:
Monthly card turnover: £250,000
Successful transactions: 10,000
Authorisation attempts: 12,000
For simplicity, assume the relevant transaction mix has already been reflected in the quoted blended rate.
Percentage charge:
£250,000 × 0.75% = £1,875
Fixed successful-transaction charges:
10,000 × £0.05 = £500
Authorisation charges:
12,000 × £0.02 = £240
Monthly platform and account costs:
£100 + £30 = £130
£1,875 + £500 + £240 + £130 = £2,745
Effective processing rate:
£2,745 ÷ £250,000 × 100 = 1.098%
Rounded:
1.10%
Percentage charge:
£250,000 × 0.90% = £2,250
Monthly account fee:
£25
£2,275
Effective processing rate:
£2,275 ÷ £250,000 × 100 = 0.91%
Provider A has the lower headline percentage.
Provider B is approximately:
£470 cheaper per month
in this simplified example because the business generates a high number of transaction and authorisation events.
Now consider two merchants with the same £250,000 monthly turnover.
A fixed charge of 5p would cost:
50,000 × 5p = £2,500
500 × 5p = £25
The same percentage and fixed fee can produce very different results.
Low-value merchants should pay close attention to:
High-value merchants may be more affected by:
A quote may show:
4p per transaction
But the word transaction can be ambiguous.
Ask whether the fee applies to:
Suppose the business completes:
20,000 successful payments
but submits:
30,000 authorisation attempts
At 4p per authorisation, the cost is:
30,000 × 4p = £1,200
not:
20,000 × 4p = £800
This is particularly important for:
A cheaper provider is not necessarily producing a better commercial outcome if more legitimate payments are declined.
Compare:
The relevant question is not only:
How much does each attempt cost?
It is also:
How much valid customer revenue is successfully collected?
A quote cannot guarantee a particular authorisation-rate improvement. Performance depends on the merchant, customer, card mix, transaction data, fraud settings, authentication and provider configuration.
A provider may advertise a low rate for UK consumer debit cards while charging substantially more for:
Use the merchant’s actual card mix.
| Card category | Monthly value | Percentage of turnover |
|---|---|---|
| UK consumer debit | £150,000 | 60% |
| UK consumer credit | £50,000 | 20% |
| Commercial cards | £25,000 | 10% |
| International cards | £25,000 | 10% |
| Total | £250,000 | 100% |
Apply each provider’s relevant price to each category.
Do not apply the UK consumer debit price to the full £250,000.
Suppose the proposed rates are:
| Card category | Turnover | Quoted rate | Expected charge |
|---|---|---|---|
| UK consumer debit | £150,000 | 0.60% | £900 |
| UK consumer credit | £50,000 | 0.85% | £425 |
| Commercial cards | £25,000 | 1.80% | £450 |
| International cards | £25,000 | 2.50% | £625 |
| Total | £250,000 | £2,400 |
The weighted percentage cost is:
£2,400 ÷ £250,000 × 100 = 0.96%
The provider may advertise:
Rates from 0.60%
But this merchant’s actual card mix produces an estimated percentage cost of:
0.96% before fixed and additional charges
Historic statements are the best starting point, but expected business changes also matter.
Examples include:
Ask the provider to model:
A quote that is cheapest today may become less competitive after the business changes.
Payment channels can be priced differently.
Usually involves a physical or software-based payment terminal.
Costs may include:
Usually requires:
Telephone or mail-order payments may involve:
A blended quote across all channels can hide a particularly expensive part of the business.
Ask for channel-level pricing.
For an online business, establish whether the payment gateway is:
Gateway monthly fee: £50
Gateway transaction fee: 6p
Monthly transaction count: 20,000
Monthly gateway cost:
£50 + £1,200 = £1,250
A provider with a lower acquiring rate could still be more expensive once the gateway is included.
Two gateways may not provide the same service.
Compare:
A more expensive gateway may still deliver better value if it improves:
For card-present processing, add:
The terminal agreement may be separate from the acquiring agreement.
The PSR’s current card-acquiring remedies require in-scope point-of-sale terminal providers to limit the initial term of relevant terminal hire contracts to 18 months, followed by a rolling arrangement. The precise application depends on the provider and terminal arrangement.
Ask:
Suppose:
Terminal rental: £20 per month
Initial term: 18 months
Simplified rental cost:
£360
Terminal rental: £35 per month
Initial term: 18 months
Simplified rental cost:
£630
Provider A appears £270 cheaper.
But also compare:
Do not select the entire payment arrangement based on the terminal rental alone.
Check for:
Minimum service charge: £50
Qualifying transaction charges generated: £32
Additional charge:
£18
Ask which fees count towards the minimum.
Gateway, terminal and PCI charges may sit outside it.
A provider might charge:
Compare:
Do not treat every charge labelled PCI as an unavoidable card-scheme fee.
It may be a provider-specific administration or service charge.
For businesses with frequent returns or cancellations, ask:
Suppose a retailer processes:
1,000 refunds per month
Provider A charges:
20p per refund
Monthly refund fees:
£200
Provider B charges no separate refund fee but does not return the original processing charge.
The cheaper result depends on:
Compare:
The PSR’s implementation guidance for comparison information specifically distinguishes retrieval fees, which may apply when an issuer requests further transaction information.
The disputed transaction value is separate from the administration fee.
For merchants accepting foreign-issued cards or multiple currencies, compare:
Ask each provider to show:
What reaches our bank account after all card and currency costs?
A competitive processing rate can be outweighed by an expensive foreign-exchange margin.
A quote may offer:
Compare:
A lower transaction price may not suit a business that needs faster access to working capital.
For more detail, see the MAS guide to card payment settlement times.
A rolling reserve is not usually an ordinary processing fee, but it can have a larger cash-flow effect than a small rate difference.
Estimated fees: £8,000 per month
No reserve
At £500,000 monthly processing, Provider B may retain:
£50,000 of new processing each month before earlier reserve releases begin
The £1,000 monthly fee saving needs to be considered against the working capital being withheld.
Compare:
See the MAS guide to merchant account rolling reserves.
The best payment quote is not necessarily the one with the smallest invoice.
Compare:
Usable cash reaching the business bank account
after:
This is particularly important for businesses with:
Record:
A provider offering an annual saving of £3,000 may be less attractive if the business must pay:
Calculate the first-year position separately from the recurring annual position.
A new provider might be:
£10,000 cheaper each year
but require:
£18,000 of migration and termination costs
The expected break-even point would be approximately:
£18,000 ÷ £10,000 = 1.8 years
This calculation should form part of the decision.
A subscription or recurring-payment business may need to move stored payment credentials.
Ask:
A rate saving can be lost quickly if the migration causes:
Before accepting a payment quote, confirm:
Ask whether the quotation includes:
A provider cannot be considered cheaper if the required solution does not work with the business’s systems.
Compare:
The value of support depends on the business.
A small seasonal retailer may need little assistance.
A platform processing millions of pounds with several integrations may need rapid access to technical and settlement teams.
A quote may include or separately charge for:
Do not compare only the monthly fee.
Ask:
A cheaper fraud tool is poor value if it blocks substantial legitimate revenue.
A provider may also offer:
Compare each method separately.
Ask:
Do not assume every non-card method is automatically cheaper or suitable for every customer journey.
A new business may not have historic statements.
Use:
Create at least three scenarios:
The business achieves less turnover than forecast.
The central business forecast.
Turnover grows faster than expected.
This reveals how:
Do not select a provider solely because it is cheapest under the most optimistic forecast.
A seasonal business should not rely on one peak-month statement.
Use a full annual profile showing:
A provider with no monthly minimum may suit the quiet season.
Another may offer better peak transaction pricing.
Compare the full twelve-month cost.
A high-turnover merchant should normally go beyond a simple rate comparison.
Consider:
A small improvement can be valuable at scale.
For example:
0.05% of £50 million = £25,000
But the rate should still be considered alongside payment performance and operational cost.
The PSR directed significant card-acquiring providers to give merchants clearer summary information and online quotation tools. The measures were designed to make prices and service features easier to compare and to prompt merchants to consider switching or renegotiating.
A summary box can help identify:
However, it may not capture the complete requirements of a merchant with:
Use it as a starting point rather than the complete commercial analysis.
No.
A lower-priced provider may produce a poorer result if it causes:
The correct question is:
Which arrangement produces the best total payment outcome at an acceptable cost and level of risk?
Suppose:
Cost relative to collected revenue:
0.80%
Cost relative to collected revenue:
0.77%
Provider B is cheaper as a percentage of collected revenue.
But the business collected £30,000 less.
That difference requires investigation before deciding the lower-cost provider produced the better result.
Possible causes could include:
Do not assume correlation proves that the provider caused the revenue difference.
Be cautious where:
A stronger negotiation uses evidence.
Provide:
Ask the provider to improve specific items.
For example:
Do not simply ask:
Can you make it cheaper?
Ask:
Can you reduce the fixed authorisation charge from 4p to 2p based on 100,000 monthly attempts?
That gives the provider a specific commercial request.
The correct result of a quote comparison may be to stay.
That can make sense where:
The purpose of comparing providers is not automatically to move.
It is to decide whether to:
A second provider can potentially offer:
But it can also introduce:
Do not add a second provider purely because one transaction rate is lower.
Define which transactions it will process and why.
Before signing, confirm:
A sales quotation is not the same as final provider underwriting and a live, tested merchant account.
Tell Merchant Advice Service:
MAS can help you:
Merchant Advice Service cannot guarantee:
Final pricing, underwriting, contracts and service terms remain with the relevant payment provider.
Merchant Advice Service provides free, independent guidance to businesses looking for help with card payments, payment gateways and more complex payment requirements.
Where appropriate, MAS may introduce a business to a relevant payment provider. We may receive a referral fee or commission if an introduction results in a completed account or service.
MAS does not necessarily compare every provider in the market, and all applications remain subject to the relevant provider’s own assessment, underwriting and approval.
This article provides general payments information and does not constitute legal, regulatory, financial, tax or accounting advice. Card-processing prices, reserves, settlement, contractual terms and service availability vary according to the provider, transaction profile and merchant circumstances.
Choose an area below and we'll take you to the relevant guide, where you can understand your options and find suitable providers.
Understand merchant accounts, acquiring and card processing options.
Online payments, ecommerce, recurring payments and complex integrations.
Explore options for taking face-to-face card payments.
Explore EPOS, POS and integrated payment setups for your business.
Guidance for businesses with more complex underwriting or payment requirements.
Explore business funding linked to your card sales.
Tell us how your business takes payments and what you're looking to change. We'll use your answers to understand your requirements and identify providers that may be suitable.
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Libby James is the founder and Managing Director of Merchant Advice Service. Since 2016, she has worked directly with businesses and payment providers across merchant accounts, card processing, payment gateways and complex provider requirements.
Libby specialises in high-risk, declined and harder-to-place merchants, as well as businesses requiring specialist payment methods, integrations or international support. She writes and reviews Merchant Advice Service content, drawing on practical experience gained from real merchant enquiries and provider relationships.
