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Merchant services: Comparing card terminal costs: facts and figures

Reading time: 8 mins

Evaluating the true cost of a credit card – or debit card – machine, when looked into carefully, is often a cause for headaches for small business owners. Card terminal costs don’t end up simply with paying the rent for the card terminal. The whole financial services part is the excuse for: debit card and credit card processing fees, merchant account fees, setup fees, exit fees... And the sheer number of fees is not the only aspect making the evaluation intricate. These fees and merchant account costs vary depending on the merchant account and financial services provider, but also, the type of PDQ machine, and the type of payment method used by the customer, the type of card used, the credit card issuer if it’s not a debit card... and business specifics of the shop itself! And it even doesn’t stop there: when the total of all these costs seem to be the same, there’s a number of options or services which make a decisive difference between merchant account providers: credit card processing costs don’t tell the whole story.

So what are these card processing fees and what are these value-added options and services? What are exactly the card terminal costs and debit/credit card transaction fees for the major merchant services providers in the UK? What are the useful tips to remember when trying to budget card machine costs and card processing fees?

Evaluating the true cost of a credit card machine for small business

Behind the simplicity of the human interaction required, card transactions mechanisms are complex. In the UK, credit card and debit card processing typically involves a number of technological and financial services which all give rise to a specific fee. Various value-added services and options make card terminal usage costs-to-benefits ratio even harder to read into.

The long list of card processing fees

Card terminal costs include a variety of fees, as the technical operations required to complete a card transaction all translate into as many fees. As these transactions simply cannot work without a dedicated merchant account set up by the merchant bank to the shop owner or merchant, these fees are sometimes called credit card merchant fees. In fact, they also cover debit card operations, although the difference between a credit card payment and a debit card payment also translates into different fee levels.

Indeed, understanding card terminal costs in detail requires understanding both the list of credit card fees and the list of criteria which may determine the amount of such fees.

Depending on merchant services provider, fees may include:

Setup fees to get the payment system working,

-  Sometimes also exit fees when the contract is terminated,

Chargeback fees,

Monthly account fees, which include...

-  ...rental fees for the PDQ machine itself, or “card terminal costs” strictly speaking...

-  ...and merchant account fees, which sometimes apply even when no transaction at all happens – “Minimum Monthly Service Fee”,

-  Card transaction fees, which in turn break up into...

-  ... fixed fees, which represent the “transaction authorization fees”...

-  ... and percentage fees, which cover credit card transaction charges and sometimes merchant service charges.

The amount of many of these fees, for each single merchant bank, differs depending on a number of factors, such as:

Business profile of the retailer accepting card payments. The number of transactions over a given period of time matters, as does the average amount of these transactions, but also the type of business as some businesses are considered more risky than others;

Payment method used. Merchant banks typically charge more for “cardholder not present” transactions such as online transactions or transactions over the phone than in-shop transactions;

Type of card used. For transactions made using a credit card, charges will usually be higher than for transactions involving debit cards;

Card network. In the UK, credit card fees applied on transactions made with American Express for example are higher than fees applied for Visa or Mastercard,

-  PDQ terminal type, if card terminal costs are included in the package. Mobile card machines will be more expensive than wireless card machines, which in turn will be more expensive than tabletop PDQ machines.

Beyond card terminal costs, services and options that make a difference

Apart from these basic fees, many services make a real difference in the actual value of a merchant bank’s package.

It’s important to check whether these services are included, optional or not included:

Real-time processing,

-  Foreign cards processing capability,

E-Wallet and M-payment processing capability,

PCI-DSS certification, which vouches for the security of the card transaction system, among other available anti-fraud measures,

Payment gateway, which is necessary to accept online payments,

SSL certificate, shopping platform, and integrations, which will be needed for e-commerce and can be obtained independently, but come in handy in a package,

Virtual terminals, which are required for phone payments,

Recurring billing.

card terminal cost

Current card payment terminal costs in the UK

In the UK, credit card fees will be quite different depending on the financial and merchant services provider. In fact, some providers may not even use the same fee structure than others, making card terminal costs comparisons difficult.

List of merchant account and credit card services providers

The merchant services market has been deeply disrupted by the rise of new players, coming from outside the traditional banking industry and rather from the tech scene.

As e-commerce and high-street commerce are merging, traditional merchant banks started selling merchant services to online merchants, and in turn, e-commerce specialists started offering physical retail services and hardware such as PDQ terminals.

Traditional players include basically every single high-street bank such as NatWest, RBS or Barclays.

New players include the likes of:


-  SumUp,



-  Square,

-  Shopify,


In between these two categories, merchant account services providers are financial institutions which do merchant services “only” and do not have a high-street presence, like NetPay.

Merchant account costs compared: a table

Comparing card terminal costs is a remarkably difficult task. However, bearing all of the above in mind, and selecting a few players, it’s possible to make a table where most relevant values are inserted.

Note that the following is only a “best case scenario”, where the fees are at their minimum for each financial services provider, VAT exclusive.

Fee type






Minimum Monthly Service Fee






Monthly Fee




£15 min.

£9 min.

Flat transaction fee – debit card






Percentage transaction fee – debit card






Flat transaction fee – credit card






Percentage transaction fee – credit card






PDQ terminal

Buy - £54


Buy - £59

Rent – various prices

Buy - £29

Online transactions



Supported, Additional Fees



Phone payments



Supported, Additional Fees



Refining figures: tips for a more personalized estimate

As the above figures work in an “ideal” environment where a company is offered the best rates, for the cheapest transaction configurations, several tips come in handy for more personalised estimates.

Volume and value of transactions

Merchant services providers and merchant banks need to know just about how many transactions will be made over a certain period of time, and for how much money per transaction. It’s just how their business works. Providing inaccurate or misleading figures will only waste time and may actually drive transaction fees up.

So it’s always a better idea to be totally transparent and do the homework of establishing a draft forecast before getting in touch with banks.

Categorizing the business

Similarly, it’s essential to be transparent about what business the shop is actually engaging into. All card transactions will go through the bank or merchant services provider network, so these providers will know anyway what is being sold. So there’s no use making up a story: in order to get the best rates, it’s always better to give as much detail as possible, and that these details are as accurate as possible.

Card and payment method types

Merchant services providers usually propose their most complete offer in a first intention. However, not every business needs to accept payments for dozens of credit card issuers and foreign banks from over 50 countries all over the world.

Similarly, not all shops will need extensive e-commerce services, or to accept all kinds of payment methods – over the phone, contactless...

Removing all these services from the package usually helps bring the price down. So it’s important to actually review business specifics to make sure they’re needed – or not needed.

The value of security

If supported card networks, languages and user locales are accessory, security is essential. Several security levels and security measures will usually be offered by the merchant services provider. The smaller the business, the less the business owner will want to rely on its own resources to ensure the overall security of payment systems, and the more he or she will be advised to disregard the price of credible security options proposed by the merchant bank.

The power of quotes

Even if this article provides what we believe to be accurate figures and useful advice, it is clear to the reader that the pricing structures of card terminal costs is complex and depends on many variables. It is therefore extremely advisable for the interested business owner to ask for as many  quotes in card terminals to specialized providers as possible, using these tips to get the most accurate quotes and negotiate the best prices.

Online services like Companeo are the perfect companions to get in touch with multiple merchant services providers in just a few clicks and receive their quotes effortlessly.

More information on Merchant services

What financing options are available for credit card terminals?Should You buy or rent a credit card machine?How to Choose a Merchant Account supplier ?