Merchant Account Fees Explained

When you first consider getting a merchant account, you will probably be overwhelmed by the fees associated with it. However it doesn’t have to be complicated. Our guide should help dissipate some of the confusion and make it easier to understand how fees are applied to this account.

Credit card processing fees

These are the main fees you will pay for using your merchant account. You will pay a fee for the privilege of having your merchant account each month, but there are other fees on top of this.

Every transaction you put through as a card payment will attract a fee. This is usually comprised of two parts. Firstly there is a flat fee per transaction, which will usually be a few pence. This can vary depending on the card used. Secondly there will be a percentage fee, which applies to the whole transaction amount.

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For example, you may be charged a flat fee of 20p plus 2%. This would mean a £9.99 transaction would incur costs to you of 20p plus 20p (rounded up), giving a total of 40p in charges. A transaction of £102.85 would incur costs of 20p plus £2.06 (rounded up), giving a total of £2.26 in charges.

You can see why many stores do not accept card payments unless they are over a certain amount. Anything too small would incur charges that are disproportionate compared to the amount earned by the store.

Breakdown of credit card rates

The flat fees and percentage rates for credit card transactions vary between providers. They are also likely to change periodically to reflect the market, which makes it impossible to provide accurate figures here for any period of time.

Needless to say you should consider which cards you tend to take payment from most often prior to choosing your merchant account provider. It is also wise to consider whether the merchant you are looking at gives you a certain number of transactions free within your usual monthly fee.

American Express

This is a famous credit card but it is not always accepted at all outlets. The reason for this is because the charges attached to processing American Express cards through a merchant account can be higher than those for other types of cards.

Furthermore, according to the UK American Express website, you must apply to them to be able to accept the card at your business. There is a charge to apply and the company will also require a percentage of any payments taken via an Amex card.

Interestingly though, SagePay seems to have one of the lowest percentage rates around when it comes to Amex cards. If you are going to accept them, it might be worth looking into SagePay first.


As you know by now, the charges applied to Visa card transactions are also likely to vary between different providers. They can also vary depending on what business you have and how high your transaction volume is. Smaller businesses are likely to pay more in one off fees and charges than larger ones, who put more payments through their merchant account.

Look for a service that provides you with the Verified by Visa security service as well. It may be more expensive but it is more secure and minimises the risk of fraud for you and your customers.


Again, Mastercard charges will vary depending on your provider. Shop around and see how many free transactions you will have included in your monthly payment. For security’s sake – and the sake of your reputation – look for a service that can provide the Mastercard SecureCode protection checks as well. Sometimes the cost of this will be included in a slightly higher fee per transaction.


It is difficult to give figures in an article such as this as they are likely to go out of date very quickly indeed. The best course of action is to consider which cards you are most likely to use and search for a provider that offers good rates on those cards.

In addition, some merchant account providers don’t advertise their rates at all. Barclays is one such example in that they usually ask you to contact them to get a bespoke quote.

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