Why UK Retailers Must Compare Card-Processing Rates Now More Than Ever

If you’re a UK retailer accepting card payments, now is the perfect time to review what you’re paying. Card processing fees have quietly become one of the biggest hidden costs in retail — and recent regulatory scrutiny has made transparency and comparison more important than ever.

1. Card processing costs vary more than most retailers realise

For many UK merchants, the total cost to accept card payments (including interchange, scheme and acquirer fees) can range between 1.5% and 3.5% of each transaction. Even small percentage differences add up fast, especially for retailers with tight margins or high transaction volumes.

Paying 0.5% too much on a £50,000 monthly card turnover means £250 in unnecessary fees — that’s £3,000 per year in lost margin.

2. Regulators say the market isn’t working well for merchants

In March 2025, the Payment Systems Regulator (PSR) published findings showing that scheme and processing fees charged by Visa and Mastercard have increased by more than 25% in real terms since 2017. The PSR concluded that the market “isn’t working well” for merchants and lacks transparency.

The Financial Times also reported that Visa and Mastercard face potential regulatory action over competition concerns, while the British Retail Consortium has called for stronger remedies to protect merchants from rising costs.

3. Why comparing rates matters right now

With costs rising and transparency improving, retailers who actively review and compare card processing deals stand to benefit the most. Here’s how:

• Immediate savings: Even small reductions in your transaction rate can deliver hundreds or thousands in savings per year.
• Better cash flow: By comparing offers, you can avoid hidden fees like authorisation charges, monthly minimums or terminal surcharges.
• Negotiating power: Knowing market rates strengthens your hand when renegotiating with your current provider.
• Scalability: As your business grows, lower rates compound into significant long-term benefits.
• Transparency: New regulations and PSR scrutiny mean more providers are being upfront about their true costs — if you ask.

4. What to check when comparing card processors

When reviewing providers, don’t just focus on the percentage fee. Compare the total cost per transaction, including:

• Monthly terminal rental and PCI fees
• Authorisation and settlement fees
• Premium card and international card surcharges
• Contract length and notice periods
• Reporting and transparency (are interchange and scheme fees itemised?)

5. A timely opportunity for UK retailers

Card payments continue to dominate UK retail spending — making it critical that retailers know exactly what they’re paying and why. With the PSR and UK media both highlighting rising costs and lack of competition, 2025 is the ideal time to benchmark your rates and switch to a fairer, more transparent deal.

For smaller and independent retailers especially, reviewing your card processing terms can be one of the simplest ways to protect margin and free up cash flow — without cutting staff, stock or service quality.

Key takeaway

If you haven’t reviewed your card processing rates in the past 12 months, you’re likely overpaying. Compare providers, request a breakdown of your current fees, and use that data to negotiate a better deal. With competition and regulation both shifting, now’s the time to make sure your payment provider is working for you — not the other way around.

Sources: Payment Systems Regulator (2025); Financial Times; British Retail Consortium.