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How much does it cost to provide card payments?

  • Blog
  • 26 October 2017

Card payments are vital for most businesses, thanks to the simplicity of payment that it provides to customers. Making sure that you’re ready to provide for the payment methods that modern customers are looking for is crucial.

That said, there are some costs associated with providing card payments. To help clear up the situation, we’ve put together this guide on how much it’ll cost to provide card payments in your business.

How much does it cost to provide card payments?

Initial set up

The first costs you will have to pay for if you’d like to provide card payments are for the payment terminals themselves. Depending on your business needs, you can either rent a card machine for a monthly payment of around £15-25 a month, or pay a little more up front to purchase a card machine outright.

This option could cost anywhere from £40 to £300+ depending on the model of terminal you’re looking for. However, over time, the higher initial cost will lead to long-term savings over monthly rental, so it pays to plan ahead.

You should also be aware that some providers will charge a one-off set up fee for your payment account. It probably won’t  affect your outgoings too much, but if you’re a new business on a tight budget, it’s certainly something to keep in mind.

Percentage or flat fee?

There are other costs associated with taking cards payments on top of the set-up and rental fees.

When you take a payment by card, your merchant account provider will take either a percentage or a fixed fee per transaction. The exact percentage and fee taken will vary by provider. The upper limit of this cost will be around 5% per transaction, depending on which model you prefer.

It may appear that taking a payment by card is, then, detrimental to your business because you end up with less of the sale value going directly into your business. However, research by the UK Cards Association found that, in 2016, 76% of all retail sales were paid by card and the average value of each transaction was £43. This data heavily suggests that the costs associated with card payments are still well worth it, due to the added value and increased business it can bring to your company.

Costs decrease with scale

Even though there are costs associated with card payments, the amount you are charged can be lowered if your business takes a large number of transactions monthly. Many providers will negotiate with you to find a mutually agreed percentage or fee if you can demonstrate a consistent amount of transactions.

Providers will usually ask for over 1000 monthly card payments before they will open discussions for bulk transaction discounts. Even if you don’t currently take enough card transactions, it’s worth being aware that the option of lower fees will be there once your business crosses that threshold, helping to reduce fees and increase your overall income.

FSB Payments from FSB

Provided by Worldpay, the UK’s leading payments provider, FSB Payments can help you wherever you’re doing business – face-to-face, online, over the phone or by email.

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