Cheapest Card Machine Fees in the UK by Turnover Band

LAST REVIEWED 2026-09-06

The crossover point

Choosing the cheapest card machine is not about the lowest headline rate. It is about matching the pricing model to monthly card turnover. Two broad models dominate: pay-as-you-go (PAYG) with no monthly fee but a higher percentage rate, and a contract acquirer with a lower percentage plus a fixed monthly fee. The crossover is the turnover level at which the monthly fee is offset by the saving on the percentage rate.

For example, if a PAYG provider charges 1.5% and a contract charges 0.8% plus a £20 monthly fee, the saving is 0.7 percentage points. Dividing the fee by the saving gives the crossover: £20 / 0.007 = £2,857. Below that, PAYG is cheaper; above it, the contract wins. With a £30 fee and a 0.6% difference, the crossover is £5,000. This is why the answer to 'which is cheapest' is often 'it depends on your turnover'.

Published rates vary, but the principle holds. The table below shows indicative costs for different turnover bands, using typical published rates. Always check the latest quotes, as fees change.

Cheapest at under £2K a month

For businesses taking under £2,000 a month in card payments, the cheapest option is almost always a pay-as-you-go reader. These typically charge no monthly fee and a percentage rate of around 1.5% to 2.0%. On £1,000 of sales, the cost is £15 to £20. A contract with a £20 monthly fee would cost £20 even before any transaction charges, so it is rarely competitive at this level.

PAYG readers are also attractive because they have no minimum contract. The user can stop at any time. This flexibility suits very small businesses, market traders, and side hustles. The main drawback is that the percentage rate is higher, so as turnover grows, the cost rises proportionally.

At £1,500 monthly turnover, a PAYG at 1.7% costs £25.50. A contract at 0.9% plus £15 monthly fee costs £28.50. The PAYG is cheaper by £3. The difference is small, but the PAYG also avoids a long-term commitment. For seasonal businesses, this can be decisive.

Cheapest at £2K to £10K

Between £2,000 and £10,000 monthly turnover, the cheapest option depends on the exact figures. At the lower end, PAYG may still win. At the upper end, a contract is usually cheaper. The crossover is often around £5,000, but it varies with the monthly fee and the percentage difference.

Consider a PAYG at 1.5% and a contract at 0.7% with a £25 monthly fee. The saving is 0.8 percentage points. The crossover is £25 / 0.008 = £3,125. So above £3,125, the contract is cheaper. At £5,000 turnover, PAYG costs £75, while the contract costs £25 + £35 = £60. The contract saves £15.

At £8,000, PAYG costs £120, contract costs £25 + £56 = £81. The contract saves £39. The gap widens as turnover grows. However, some PAYG providers offer lower rates for higher volumes, which can push the crossover higher. It is essential to compare like-for-like quotes.

The table below illustrates typical costs for three turnover levels, using published rates from major providers.

Cheapest above £10K

For monthly card turnover above £10,000, a contract acquirer is almost always the cheapest option. The percentage rate is significantly lower, often below 0.5% for blended rates, and the monthly fee becomes a small fraction of total cost. For example, at £20,000 turnover, a PAYG at 1.5% costs £300. A contract at 0.4% plus a £30 monthly fee costs £80 + £30 = £110. The contract saves £190 per month.

At this level, businesses should also consider interchange-plus pricing, where the acquirer passes on the interchange fee plus a small margin. This can be cheaper than a blended rate, especially for debit-heavy sales, because debit interchange is capped at 0.2% under the Interchange Fee Regulation. A typical interchange-plus quote might be 0.2% + 0.1% margin, giving a total of 0.3% for debit. That is far below the 1.5% PAYG rate.

However, contract acquirers often require a minimum term, and the PSR has capped terminal lease terms at 18 months. This protects businesses from being locked into expensive hardware. It is still wise to compare total costs, including any setup fees, PCI compliance fees, and statement fees.

Debit-heavy vs credit-heavy businesses

The mix of debit and credit cards affects the cheapest option. Debit interchange is capped at 0.2% and credit at 0.3% under the Interchange Fee Regulation. However, acquirers often charge a blended rate that does not distinguish between card types. A blended rate of 1.5% is far above the interchange caps, so the acquirer's margin is large.

For a business that takes mostly debit cards, an interchange-plus pricing model can be significantly cheaper. For example, if the acquirer charges interchange plus 0.2% margin, the total for debit is 0.4% (0.2% + 0.2%). On £10,000 of debit sales, that is £40, compared to £150 at 1.5% blended. The saving is £110.

For credit-heavy businesses, the saving is smaller because credit interchange is higher, but still substantial. At 0.3% interchange plus 0.2% margin, the total is 0.5%, which is still far below 1.5%. The crossover point for interchange-plus vs PAYG is lower than for blended contracts, because the effective rate is lower. Businesses with high average transaction values may benefit even at lower turnovers.

It is important to ask for a breakdown of fees and to estimate the effective rate based on the actual card mix.

Costs the cheapest option leaves out

When comparing card machine fees, the headline percentage rate is not the only cost. Pay-as-you-go readers often charge extra for certain transactions, such as keyed-in payments, refunds, or chargebacks. Some also have a minimum transaction fee or a monthly minimum if turnover is low. These can add up.

Contract acquirers may charge a separate PCI compliance fee, a statement fee, or a setup fee. Hardware costs are another factor. Some providers offer a free reader, but others charge a rental fee. The PSR has capped terminal lease terms at 18 months, but the monthly rental can still be significant. For example, a terminal rental of £15 per month adds £180 per year.

There may also be early termination fees if the business leaves before the contract ends. These are not always published. The cheapest option on paper may not be the cheapest in practice. It is essential to read the full terms and conditions and to ask for a total cost of ownership over a year.

Finally, consider the cost of funds. Some providers delay settlement, which can affect cash flow. While not a direct fee, it has a financial impact.

Frequently asked questions

Is a no-monthly-fee reader always cheapest?

No. A no-monthly-fee reader usually has a higher percentage rate. For low turnover, it is often cheapest because the monthly fee would be a larger proportion. But as turnover rises, the higher percentage rate outweighs the saving on the monthly fee. The crossover point is typically around £5,000 per month, but it depends on the specific rates. Above that, a contract with a lower percentage and a monthly fee is usually cheaper.

How do I calculate the effective rate?

Your effective rate is the total cost of card processing divided by your total card turnover, expressed as a percentage. To calculate it, add up all fees: the percentage fee on each transaction, any monthly fee, and any other charges like PCI compliance or statement fees. Then divide that total by your card turnover for the same period. For example, if you pay £50 in fees on £5,000 of sales, your effective rate is 1%.

Do cheap readers charge more for credit cards?

Some pay-as-you-go readers charge a higher percentage for credit card transactions compared to debit. This is because credit card interchange is capped at 0.3%, while debit is capped at 0.2%, but acquirers may add a larger margin for credit. Always check the rate card. A blended rate may not differentiate, but interchange-plus pricing will. For credit-heavy businesses, the effective rate will be higher.

Is it cheaper to negotiate directly with an acquirer?

Negotiating directly with an acquirer can sometimes result in lower rates, especially for high turnover businesses. Acquirers may offer custom pricing based on volume and card mix. However, this requires time and knowledge. For small businesses, a standard package may be more cost-effective. It is always worth asking for a better deal, but compare the total cost, not just the headline rate.

Do fees drop as turnover grows?

Yes, typically. As turnover grows, the percentage rate often decreases because the acquirer's fixed costs are spread over more transactions. Also, the monthly fee becomes a smaller proportion of total cost. However, this is not automatic. You may need to renegotiate or switch providers. The crossover point is where a contract becomes cheaper than PAYG, usually around £5,000 monthly turnover.