Card Machine Transaction Fees Explained

Every time a customer pays by card, the business pays a small fee — a percentage of the transaction value. These fees fund the payment infrastructure: the card networks (Visa and Mastercard), the issuing bank (the customer's bank), and the payment processor (your card machine provider).

Understanding how these fees work helps you choose the right provider and avoid overpaying.

What is a Transaction Fee?

A transaction fee is a percentage of each card payment that goes to your payment processor. For most UK small businesses using modern providers, this is between 1.69% and 1.75% of the transaction value.

Example: A customer pays £50. At 1.75%, you pay 87.5p to the payment processor. You receive £49.13.

What Drives the Transaction Rate?

Transaction rates are made up of several components:

• Interchange fee — paid to the customer's issuing bank (regulated in the UK at 0.2% for debit, 0.3% for credit)
• Scheme fee — paid to Visa or Mastercard for use of their network
• Processor margin — the payment provider's cut for providing the hardware, software, and support

The published rate you see (e.g. 1.75%) covers all three. Providers with lower rates are typically taking a smaller margin, or have better interchange agreements due to higher processing volume.

Flat Rate vs. Interchange Plus Pricing

Most small business card machine providers use a flat rate — one percentage for all card types. This is simple and predictable: you always know exactly what you'll pay.

Some larger-volume businesses use interchange plus pricing, where the exact fee varies depending on the card type used. This can be cheaper for businesses processing over £500k per year, but it adds complexity for smaller operators.

Hidden Fees to Watch Out For

Some card machine providers advertise a headline transaction rate but add charges that increase your real cost:

• Monthly minimum charges — if you don't hit a volume threshold, you pay a top-up fee
• Statement fees — some providers charge for monthly statements
• Authorisation fees — a small fixed fee per transaction on top of the percentage
• Payout fees — some providers charge to transfer your money to your bank account
• Chargeback fees — fees for disputed transactions

With DOJO via Payment Card Services, the transaction rate is the transaction rate. There are no monthly minimums, no statement fees, and no hidden charges sitting beneath the headline number.

How to Compare Transaction Rates Fairly

When comparing providers, calculate your total cost per month under each option:

1. Take your average monthly card turnover
2. Multiply by the transaction rate (as a decimal)
3. Add any monthly rental fee
4. Add any other fixed charges

This gives you the true monthly cost of each option, allowing a like-for-like comparison rather than one based on headline rates alone.

The Bottom Line

For UK small businesses, the best card machine pricing combines a competitive transaction rate with zero monthly rental. DOJO, accessed through Payment Card Services, delivers exactly this — and adds next-day payouts and 24/7 UK support to make it the complete package for businesses that depend on card payments every day.