Online Payment Processing Fees UK: A Guide for UK Businesses

Every online payment your customer makes takes a small slice of the sale, and those payment processing fees can add up faster than many UK businesses expect.

If your business accepts card payments, online checkout, invoices, payment links or QR-code payments, you'll usually pay payment processing fees. Understanding the mix of percentage rates, fixed charges, international-card costs and disputes can help you keep more of your revenue and choose a provider that fits your business.

This guide explains online payment processing fees in the UK, the different charges to look out for, how online and in-person fees differ, and how to compare providers using your own sales data.

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Online payment processing fees at a glance

Online payment processing fees are the charges involved in moving money from a customer to your business when they pay by card, digital wallet, payment link, invoice or online checkout. The headline rate matters, but it isn't the whole price.

How much are online payment processing fees in the UK?

It depends on the provider, payment route, card type and where the customer is based. For example, Square publishes a rate of 1.4% plus 25p for UK online-card transactions, while PayPal's 'All Other Commercial Transactions' rate is 2.9% plus a fixed fee, with a 30p fixed fee for GBP.^1,2

Those figures aren't directly comparable without your own sales data. Square and PayPal also publish different rates for other routes and international payments, so use the table as a starting point rather than a quote.

What changes the cost of online payments?

Card-present and card-not-present payments

An online checkout, payment link, invoice or manually entered card payment is a card-not-present payment. A card reader at a counter is card-present. Providers often publish separate rates for each, so don't use your in-person rate to forecast ecommerce costs.

Fixed fees and average order value

A fixed fee can make a low-cost item expensive to process in percentage terms. For example, a 25p fee is 2.5% of a GBP 10 order before any percentage rate is added, but 0.25% of a GBP 100 order. Model both the percentage and fixed part against your usual basket size.

International cards and conversion

If you sell outside the UK, check for a different international-card rate, an extra cross-border charge and a currency conversion charge. Those can apply at different stages, so ask whether the quoted card-processing rate already includes them.

Platform and payment-method choices

Your ecommerce platform, payment gateway and provider may each add a cost. A platform can charge a subscription, a provider can charge the payment-processing rate, and an optional tool can add another monthly or transaction charge. Map the full route before comparing offers.

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How to calculate your real online payment processing cost

Start with a month of actual sales data, then run each provider's pricing against it.

1. Split transactions by payment route: online checkout, payment link, invoice, manual entry and in-person card payment.
2. Split cards by customer location and type where your reports allow it: UK, EEA, non-EEA, consumer, premium or commercial.
3. Add the percentage fee and fixed fee for each group.
4. Add monthly plans, gateway tools, platform charges, hardware, refunds, disputes and any currency conversion or payout costs.
5. Divide the total by sales revenue and by number of transactions to see both your effective rate and cost per order.

Use a high month and a quiet month as well as an average one. A plan that looks cheap when sales are high can become less attractive when fixed subscriptions are spread across fewer orders.

How to reduce online payment processing fees

You can't remove card-processing costs entirely when customers pay by card. You can, however, make sure you're paying for the routes your business actually uses and not letting small extra costs compound unnoticed.

Match the pricing model to your average order value

Start with the two parts of the transaction charge: the percentage and the fixed fee. A business selling low-value items may find that the fixed amount changes its effective rate sharply, while a business with larger orders may care more about the percentage.

Take a month's sales, group orders into realistic value bands and run the provider's rate against each band. This gives you a more useful answer than comparing one percentage in isolation.

Split UK and international customer payments

Don't forecast all cards at the domestic rate if a meaningful share of your customers are overseas - and check provider information on differences in online rates between the two.

Compare the route your customer actually uses

Online checkout, payment links, invoices, saved cards and manually entered payments can have different pricing. For instance, according to Square, its manual-entry and invoice rate is structured differently from its online-card rate.¹

If invoices are only a small part of your sales, a higher invoice rate may not matter much. If your business is service-led and invoices are the main route, it could be the rate that drives the decision.

Check the costs around the headline rate

Make a one-page list of every cost that sits around card processing: ecommerce-platform subscription, payment-gateway tools, optional fraud products, monthly plans, card-reader hardware, payouts, refunds, disputes and currency conversion.

This is especially important after a platform-plan change or when you add a new payment method. A lower transaction rate can be outweighed by a new monthly charge or platform surcharge.

Reduce avoidable refunds and disputes

Clear product descriptions, delivery expectations, order confirmations and responsive customer service won't change the original processing rate, but they can reduce the number of payments that later need manual work, refunds or dispute handling.

Review the reasons customers contact you after payment and improve the step that causes repeated confusion. This is often more practical than trying to shave a fraction off a card rate.

Ask for a tailored quote when volume grows

Once your processing volume is meaningful, ask providers to price your actual mix of transaction value, card origin and payment methods. Bring your own data to the discussion, including online versus in-person split, international share and refund rate.

That gives you a better basis for negotiation than a generic comparison table.

Online vs in-person processing fees

If you sell both online and in person, compare both routes separately and check provider information. For example, according to Square's UK pricing page, its in-person rate is 1.75% for UK cards, while its online rate is 1.4% plus 25p for UK cards.¹

That doesn't make one route universally cheaper, though. Ultimately the result depends on the transaction amount and your own sales mix. But it does show why a single 'card processing fee' isn't enough for a business that uses multiple ways to get paid.

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FAQs

What is a payment processing fee?

It is the cost charged to process a payment from your customer to your business. It can include a per-payment percentage, fixed charge and other route-specific costs.

How much does it cost to process an online payment?

It depends on the provider, payment route, card type and customer location. The published examples above range from a percentage-only fee to a percentage plus a fixed fee, with separate international-card pricing in some cases.^1,2

Which online payment processor has the lowest fees?

There isn't one lowest-cost provider for every business. Calculate the full cost using your average order value, number of payments, customer countries, payment types, recurring fees and any platform or conversion charges.

Sources:

1. Square Processing Fees, Plans and Software Pricing
2. PayPal Merchant Fees - Seller Fees | PayPal UK

Sources last checked on 31st July 2026