How Much Do Card Payments Cost Restaurants in the UK?
What card payments cost UK restaurants
Most UK restaurants pay somewhere between 0.5% and 2.5% per card transaction. Where you land depends on the card the customer uses, whether they pay in person or online, and who your provider is.
Take a restaurant doing £800,000 a year at a blended rate of 1.3%. That's about £10,400 in processing fees, and it doesn't include monthly fees or terminal rental.
Where the money goes
Each card payment carries three charges. Most providers roll them into one blended rate, so you rarely see the split.
Interchange goes to the customer's bank. It's capped at 0.2% for UK consumer debit cards and 0.3% for consumer credit cards. Commercial cards (company credit cards, purchasing cards, travel cards) aren't capped, and interchange alone on those usually runs 1.5%-2.0%.
Scheme fees go to Visa or Mastercard for using their network. Usually 0.1%-0.3%.
The acquirer margin is what your payment processor keeps, anywhere from 0.1% to 0.8%. This is the part you can actually negotiate.
Cost by payment type
| Payment type | Typical cost range |
|---|---|
| In-person debit (contactless / chip and PIN) | 0.5% - 1.0% |
| In-person consumer credit | 0.7% - 1.5% |
| In-person commercial card | 1.5% - 2.5% |
| Online debit card | 1.0% - 1.8% |
| Online consumer credit | 1.3% - 2.2% |
| American Express (in-person or online) | 1.5% - 3.0% |
Online payments cost more across the board. They're card-not-present transactions, the fraud risk is higher, and the restaurant pays for that.
Pricing models
A flat or blended rate is one percentage on every transaction. It's easy to read on a statement. It's also often too high for a restaurant where most people pay by debit, because the low cost of those debit transactions doesn't get passed on to you.
Interchange plus means you pay the real interchange on each transaction plus a fixed margin, say interchange + 0.25%. You can see exactly what you're paying, and for medium and high volume restaurants it often works out cheaper.
Tiered pricing sorts transactions into bands, each with its own rate. It's hard to follow and rarely in your favour. Only take it if the total effective rate is clearly lower than the other quotes you've got.
Working out your effective rate
Most UK restaurant customers pay by debit card. If 70% of your transactions are consumer debit, those probably cost you around 0.5%-0.9%. Credit and commercial cards make up the rest and drag the average up.
To get your real number, take the total card processing fees from your last statement and divide by total card revenue for the same period. If it's over 1.5% and most of your payments are in-person debit, you're probably overpaying.
Other charges
| Charge | What it is |
|---|---|
| Monthly service fee | Fixed charge for your account |
| Terminal rental | Monthly fee per device |
| Authorisation fee | A few pence per transaction |
| Chargeback fee | Charged on each disputed payment |
| PCI compliance fee | For keeping up with card security standards |
| Early termination fee | For leaving before the contract ends |
Terminal rental is the one that creeps up on people. Three terminals at £25 a month each is £900 a year before a single transaction fee. At 1%-1.5%, that's the same as the processing fees on an extra £60,000-£90,000 of sales.
Paying less
On higher volumes, moving from a flat rate to interchange-plus usually brings the effective rate down.
Interchange and scheme fees barely change from one provider to the next. The acquirer margin does, so get quotes from two or three providers before your contract renews and use them against each other.
Buy your terminals instead of renting them. No more monthly rental.
If you take delivery orders through marketplaces, the commission there (15%-35% per order) is a far bigger cost than any card fee. Every order that comes through your own online ordering website or branded app instead saves more than shaving a few basis points off your card rate.
Connect payments to your POS. With an integrated restaurant POS and payments platform, nobody has to reconcile card takings by hand and your net revenue figures are right.
Annual cost at a glance
| Annual card revenue | Effective rate | Annual processing cost |
|---|---|---|
| £250,000 | 1.0% | £2,500 |
| £250,000 | 1.5% | £3,750 |
| £500,000 | 1.0% | £5,000 |
| £500,000 | 1.5% | £7,500 |
| £1,000,000 | 1.0% | £10,000 |
| £1,000,000 | 1.5% | £15,000 |
Payments with Flipdish
Flipdish connects payments to its POS system, online ordering and kiosk products. In-person and online payments land in one report, so there's no manual reconciliation.
Groups with several sites see payment data for every location in one place, and they don't need a separate payment contract for each one.
If you want to know how your current rates compare, talk to the Flipdish team about your card mix and volume.
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