When a customer makes a card payment, a variety of players – banks, card networks, and payment processors – charge fees for their part in the payment process. Since card payments are so popular in the United Kingdom, which saw 2.18 billion debit and credit card transactions in May 2026 alone, understanding these fees can help businesses maximise their revenue. Choosing the right payment processor and fine-tuning their payment setups can help them avoid unnecessary losses with each card payment.
Below, we'll cover the different types of card processing fees and the factors that affect them.
Key takeaways
UK card processing fees are made up of several separate charges, including interchange, assessment, processor, gateway, cross-border, and chargeback fees – each paid to a different party and driven by different factors.
The type of card, transaction method, business type, and volume all influence how much a business ultimately pays per transaction.
Brexit has increased costs for UK-EU cross-border transactions, pushing businesses to rethink payment strategies and processor agreements.
Types of card processing fees
There are a few different types of card processing fees. These fees differ based on agreements with payment processors, the business type, and the transaction volume. Here are some of the different types of card processing fees:
|
|
Paid to
|
What it depends on
|
|---|---|---|
| Interchange fee | The cardholder's issuing bank | Card type (debit vs. credit) and whether it's a domestic or cross-border transaction |
| Assessment fee | The card network (Visa, Mastercard) | Set by the network at a consistent global rate, with some UK-specific variations |
| Payment processor fee | The payment processor | Provider, business size, and the specific agreement in place |
| Payment gateway fee | The payment gateway (if separate from the processor) | Whether the processor also acts as the gateway |
| Cross-border fee | The card network | Whether the transaction crosses UK–EU borders |
| Chargeback fee | The card network and/or payment processor | The processor's rules and the nature of the business (higher-dispute industries typically see higher fees) |
Interchange fees: Companies pay interchange fees to the cardholder's issuing bank. The UK caps interchange fees at 0.2% for domestic consumer debit card transactions and 0.3% for domestic consumer credit card transactions.
Assessment fees: Businesses pay assessment fees to the card networks (e.g., Visa, Mastercard). The structure and rates are consistent with global standards but can include specific rates for UK businesses.
Payment processor fees: Payment processors charge payment processor fees. These fees vary in amount depending on the provider, business size, and agreement between parties. They are built for the UK market and account for factors such as local payment methods.
Payment gateway fees: Payment gateways charge these fees for card payments and other electronic payment methods. However, some payment processors such as Stripe also act as payment gateways and don't charge additional fees for these services.
Cross-border fees: Card networks charge cross-border fees for international transactions. After Brexit, these can apply to payments between the UK and the European Union.
Chargeback fees: Card networks and payment processors generally set chargeback rules and fees. Fees differ based on the processor and the nature of the business.
Factors that affect card processing fees in the UK
Card processing fees for UK businesses can vary depending on several factors. Here are the key elements that influence these fees:
Type of card used: Fees differ according to whether the card is a debit or credit card and whether it is a standard, premium, or corporate card. Premium and corporate cards generally have higher fees due to their additional benefits and rewards programmes.
Transaction method: Fees can vary based on whether the transaction is made in person (e.g., chip and PIN, contactless) or online. Card-not-present (CNP) transactions such as online payments usually have higher fees due to increased fraud risk.
Business type: Different industries have different risk levels. Hospitality or travel businesses, which are more prone to disputes and chargebacks, might face higher fees than low-risk industries such as retail.
Transaction volume and value: Higher transaction volumes can lead to lower fees, since many payment processors offer tiered pricing or volume-based discounts. This means small businesses with lower transaction volumes often end up on higher-rate tiers than large retailers, making it worthwhile to shop around or renegotiate as sales grow. The average transaction value also affects pricing models, so a business with many small transactions might pay a higher effective rate than one with fewer, larger sales.
Payment processor agreement: Fees change depending on the specific agreement with the payment processor. Some processors might offer flat-rate fees, while others might use an interchange-plus model in which the fee is a combination of the interchange rate and a markup.
Domestic vs. international payments: Transactions that involve foreign cards (e.g., cross-border transactions) usually have higher fees. If a customer pays in a currency that is different from the business's settlement currency, currency conversion fees might apply too.
Regulatory changes: The UK caps domestic interchange fees but no longer caps fees for cross-border transactions between the UK and the EU due to Brexit. In 2026, the UK's Payment Systems Regulator (PSR) released its final findings confirming that it has the authority to cap UK-EEA interchange fees, following a court ruling that upheld this power. Card fee reform is now one of the top priorities in the PSR's 2026/27 work plan, with the regulator moving towards setting a cap level and timeline.
Security features and fraud prevention: Some processors offer lower fees for businesses that use advanced fraud protection measures such as 3D Secure. However, other processors might charge extra for these services.
Financial history: Payment processors might adjust fees based on a business's credit history, financial stability, and risk of chargebacks.
Stripe’s UK card processing fees
For UK businesses, Stripe charges a flat fee for all card types plus a percentage fee that varies depending on the card and transaction type. There are no additional gateway fees with Stripe.
Stripe's pricing generally follows a tiered structure based on card type:
- Standard UK consumer cards carry a lower percentage rate.
- Premium UK cards, such as corporate cards, are charged at a higher percentage.
- EEA cards carry a higher rate still, reflecting the cross-border nature of the transaction.
- International cards outside the EEA are charged at a higher percentage rate.
- Transactions involving currency conversion incur an additional percentage-based fee.
All of these fees include a small fixed per-transaction charge alongside the percentage.
Businesses with large payment volumes or unique business models can also work with Stripe to create custom pricing.
How this breaks down: A worked example
To see how fees stack up in practice, here's a simplified example using an interchange-plus pricing model, where the processor charges an example interchange fee plus a fixed markup.
Say a UK customer pays £100 with a standard UK consumer debit card, in person:
|
Fee
|
Rate
|
Amount
|
|---|---|---|
| Interchange fee (to issuing bank) | 0.2% (domestic debit cap) | £0.20 |
| Assessment fee (to card network) | ~0.13% (example rate) | £0.13 |
| Processor markup | ~0.5% + £0.10 (example rate) | £0.60 |
| Total fees | £0.93 |
In this situation, the business would receive roughly £99.07 on the £100 sale.
The assessment fee and processor markup used here are examples – actual rates vary by network, processor, and agreement, and a business should check its own statement or provider's pricing page for exact figures. Swap in a credit card, an EEA or international card, or a card-not-present transaction, and each layer shifts accordingly. This is why the same £100 sale can net a business anywhere from under £1 to several pounds in total fees depending on the card and channel involved.
How Brexit has affected card processing fees
Brexit has resulted in higher card processing costs for UK businesses that engage in cross-border trade with the EU. UK businesses have had to adapt to changing fee structures and adjust their payment tactics to mitigate these increased fees, whether through negotiation, finding alternative payment methods, or exploring new markets.
Here’s how Brexit has affected these fees:
Cross-border fees: Before Brexit, transactions between the UK and EU countries were considered "intraregional". These incurred lower interchange fees under the EU's Interchange Fee Regulation (IFR), which capped fees at 0.2% for debit cards and 0.3% for credit cards. After Brexit, these transactions are now considered "interregional" or "cross-border" and have higher interchange fees. For instance, Visa and Mastercard raised interchange fees for consumer UK-EEA CNP transactions to 1.15% for debit cards and 1.50% for credit cards. On this particular fee, Visa and Mastercard's rates are identical. As covered above, this gap between pre- and post-Brexit rates is currently the subject of active regulatory intervention – the PSR is working from a confirmed legal footing following the courts' January 2026 decision, and is treating the rollout of a fix as a near-term priority rather than a longer-term possibility.
Payment processor fees: Some payment processors now have custom pricing for UK companies that do a significant amount of business with EU customers, to mitigate the impact of increased fees.
How Stripe Payments can help
Stripe Payments provides a unified, global payments solution that helps any business – from scaling startups to global enterprises – accept payments online, in person and around the world.
Stripe Payments can help you:
- Optimise your checkout experience: Create a frictionless customer experience and save engineering time with prebuilt payment UIs, access to 125+ payment methods, and Link, Stripe's consumer network.
- Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
- Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalise interactions, reward loyalty and grow revenue.
- Improve payments performance: Increase revenue with a range of customisable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorisation rates.
- Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.
Learn more about how Stripe Payments can power your online and in-person payments or get started today.
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.