As businesses across the UK look for ways to manage rising operational costs, many are missing a significant but often overlooked expense, card processing fees. According to industry estimates, UK retailers alone paid over £1.26 billion in processing fees in 2022, with that number expected to grow as card use continues to dominate consumer spending.
With most businesses now heavily reliant on card payments, both in-person and online, these transaction fees are becoming a more critical factor in profitability. Yet despite their impact, many business owners are unaware of how much they’re actually paying, or whether they could be paying less.
One emerging solution is Compare Card Fees, a UK-based service that helps businesses benchmark and reduce their merchant processing costs by identifying better-value providers. The platform is part of a growing push toward transparency in the payments industry giving business owners more control over a cost that’s often buried in complex monthly statements.
Hidden Costs Across Every Sector
Whether you’re a high street retailer, independent café, online store, or professional service provider, chances are you’re handing over between 1.5% and 3.5% of every transaction to a card processor. In some sectors, particularly high-risk categories such as travel, the effective rate can be even higher.
These percentages might sound small, but the costs add up quickly. A restaurant processing £500,000 a year in card transactions at 2.5% is losing £12,500 annually, money that could otherwise be reinvested into staffing, technology, or marketing.
These figures don’t even include the flat monthly service fees many providers charge, nor the rental cost of payment terminals, PCI compliance fees, or chargeback penalties. When all is said and done, the real cost of card acceptance can significantly erode business margins.
Transparency Unlocks Savings
Compare Card Fees works by breaking down the layers of card processing charges and providing a side-by-side comparison of providers based on real business needs. Businesses using the service typically reduce their transaction costs by 20 to 40 percent without needing to switch banks or radically change their setup.
“We thought our rates were competitive until we saw a breakdown of what we were actually paying,” says Julie Marsden, co-owner of a family-run travel agency in Yorkshire. “Using Compare Card Fees, we identified hidden costs and switched to a better provider. The savings now cover our software subscription and staff training each year.”
In one recent case, a Midlands retailer lowered their effective rate from 2.8% to 1.9%, saving over £12,000 a year on a £600,000 turnover.
Why This Matters Now
The surge in contactless and online payments—accelerated by post-pandemic consumer habits has made card acceptance non-negotiable for most businesses. But it’s also increased the volume of fees paid, particularly for small-ticket and card-not-present transactions, which are typically charged at higher rates.
Since Brexit, many UK merchants have also faced rising cross-border interchange fees. In response, the UK’s Payment Systems Regulator is considering new caps to help reduce the burden. Until regulation catches up, though, many businesses are effectively overpaying sometimes by thousands of pounds each year.
Time to Take Control
Card processing fees remain one of the few major business expenses that can be negotiated. But only if you know what to look for.
Services like Compare Card Fees are helping demystify the landscape, making it easier for businesses to audit what they’re paying and compare what they could be paying instead. In a time of economic pressure, those savings could make the difference between surviving and thriving.
Learn more about how to review your processing costs at www.comparecardfees.co.uk.