card-fees

---
name: card-fees
description: Reads a year of merchant statements and works out what taking a card payment actually costs you, per transaction and per £100 taken, split into the three fees that make it up, with the exact figures to ask your provider for. Use before renewing a card machine contract, when the fees have crept up, or when nobody can explain the deductions on the statement.
---

# Find out what taking a payment actually costs you, per transaction

You give this twelve months of merchant statements from whoever handles your card payments, plus the terminal agreement if you can find it. You get back your real cost per £100 taken and your real cost on an average sale, split into the three fees that make up the charge, every extra fee named and totalled, and a short list of the exact figures to ask your provider for in writing. It will not tell you to switch. It tells you what you are paying, what of it is fixed by regulation and what is the provider's margin, and which questions get you a straight answer.

## What it does

1. **Collect twelve months of statements per merchant account, and find the second and third contract.** Most hospitality sites have more than one agreement even though the money all lands in one place. There is the card-acquiring contract, there is usually a separate point-of-sale terminal lease or rental, which may be with a completely different company, and there may be a gateway for online bookings and a PCI DSS compliance service. Collect the monthly statements, the schedule of rates you were given when you signed, and any terminal agreement. Write down how many terminals are on site, including the spare in the office and the one the events team takes out. The Payment Systems Regulator describes a typical basic offering for a merchant selling face to face as "card-acquiring services", "one or more POS terminals, which the merchant hires", and "services to enable the merchant to certify (and in some cases, assist) their compliance with PCI DSS requirements". You are paying for all three, and only the first is the payment.

2. **Compute the real blended cost before looking at a single rate.** Take the total value of fees paid for card-acquiring services across the twelve months and divide it by the total value of card transactions. That is the measure the regulator itself uses: "The average MSC is calculated by dividing the total value of fees paid for card-acquiring services by the total value of purchase transactions." Express it two ways, because owners think in both: as a percentage, and as pounds per £100 taken. Then divide total fees by the number of transactions to get pence per sale, and put your average transaction value beside it. A café taking £6.80 a head and a restaurant taking £68 a head can be on identical rates and have completely different costs, because a fixed pence-per-transaction authorisation fee is trivial on one and material on the other.

3. **Split the charge into the three things it is made of.** The regulator sets it out plainly: the merchant service charge "comprises interchange fees, paid by the acquirer to the issuer, scheme fees, paid by the acquirer to the operator of the card payment system (such as Mastercard and Visa), and acquirer net revenue, which recovers the acquirer's other costs and margin". Only the third is your provider's. The first is capped in the UK: "0.2% of the value of a transaction for consumer debit cards (including prepaid cards), and 0.3% for consumer credit cards". Where the statement shows interchange separately, put the three figures side by side. Where it does not, say so and put the question on the list, because a statement that shows one blended number has told you nothing about which part is moving when the price rises.

4. **Name which pricing structure you are actually on.** There are four, and they behave differently. Standard pricing, where the acquirer does not automatically pass through the interchange fee applicable to each transaction. Interchange fee plus, where it does. Interchange fee plus plus, where it passes through both interchange and scheme fees at cost. And fixed pricing, a flat periodic fee. The regulator found that "Over 95% of acquirers' merchants have standard pricing", which typically consists of "several 'headline rates' that are applied to different types of purchase transactions" plus "one or more additional fees or rates" triggered by events or by transaction type. Standard pricing has one consequence worth writing in plain words for the owner: "with standard pricing there will always be circumstances in which the same headline rate applies to transactions that attract different interchange fees", so the provider's margin varies by transaction and the headline rate on the front of the statement is not the price.

5. **List every fee that is not the headline rate, and total it.** Go through twelve months of statements and pull out each named charge: authorisation fees per transaction, minimum monthly service charge, PCI DSS compliance fee, PCI non-compliance fee, chargeback fees, refund fees, non-secure or card-not-present premiums, commercial card rates, non-UK card rates, statement or admin fees, terminal rental per terminal, gateway fees. Show each as a twelve-month total and as a percentage of all fees. This is the step that produces the surprise. A pub paying rental on four terminals, a monthly PCI charge and a minimum monthly service charge in February can find that a third of what it pays has nothing to do with the rate it negotiated. Flag any minimum monthly service charge separately if the business closes seasonally, because a minimum is a bill for not trading.

6. **Pull the terminal agreement out of the acquiring agreement and check its dates.** The regulator identified terminal contracts as one of the things that keeps merchants stuck: a merchant "typically cannot use its existing POS terminal with a new card-acquirer", and "could incur a significant early termination fee when cancelling its existing POS terminal contract, even if no such fee would apply when cancelling its card-acquiring services contract". It found these contracts running to "three and five years" and renewing "automatically for successive fixed terms", with early termination fees that "can include, for instance, all outstanding payments due up to the end of the initial/renewal term". The PSR's remedies then set "a maximum duration of 18 months for Point of Sale (POS) terminal lease and rental contracts with a rolling monthly contract thereafter", which the fourteen directed firms had to implement from January 2023. Write down, per terminal, who the agreement is with, when it started, its term, its renewal date and what it says about early termination. A saving on the acquiring rate that is wiped out by an exit fee on a five-year terminal lease is not a saving.

7. **Ask for the summary box, then use the unblending right to get the breakdown.** Two things you are entitled to ask for and most owners have never heard of. The PSR's remedies require directed providers to send "summary boxes containing bespoke key price and non-price information" individually to each business and show them prominently in the online account, in force from July 2023, alongside "trigger messages" prompting businesses to shop around, and an online quotation tool to compare. Separately, the retained Interchange Fee Regulation says at Article 9 that "Each acquirer shall offer and charge its payee merchant service charges individually specified for different categories and different brands of payment cards with different interchange fee levels unless payees request the acquirer, in writing, to charge blended merchant service charges", and that acquirers "shall include in their agreements with payees individually specified information on the amount of the merchant service charges, interchange fees and scheme fees applicable with respect to each category and brand of payment cards". Draft two short written requests: one for the current summary box, one for the itemised breakdown by card category and brand. Then check whether anyone in the business ever asked in writing for blended pricing, because that is the only thing that removes the itemisation.

8. **Test the direction of travel, because the parts move separately.** Plot the blended cost per £100 month by month across the twelve months, alongside the mix: debit versus credit, contactless versus chip and PIN, card-present versus online, UK versus non-UK. A rising blended cost with a stable mix is a price rise. A rising blended cost with a shifting mix is your customers changing how they pay. The regulator's own finding is why this matters: comparing the period before and after the interchange caps came into force, for merchants with annual card turnover under £15,000 average interchange fees fell by 0.19 percentage points while the average merchant service charge fell by 0.03, and for merchants between £15,000 and £180,000 the figures were 0.17 and 0.02. Its conclusion for that group was that they "got little or no pass-through of the IFR savings". Meanwhile it found that average scheme fees "more than doubled over the period from 2014 to 2018". The parts you do not control move in both directions and your provider decides how much of that reaches you.

9. **Write the output as three lists with money on each.** List one, the numbers: cost per £100, pence per average sale, total fees for the year, the three-way split where the statement shows it, and the twelve-month total of every fee that is not the headline rate. List two, ask in writing: the summary box, the itemised breakdown by card category and brand, the interchange and scheme fee figures for your own account, and confirmation of whether anyone requested blended pricing in writing. List three, the dates: every terminal, gateway and PCI agreement with its renewal date and exit position, earliest first. Do not end with a recommendation to switch. End with the owner knowing what they pay and holding four questions their provider has to answer.

## Then it checks

1. Every fee total in the output is the sum of named statement lines, and the sum of all fee categories equals the total fees for the year.
2. The blended cost is computed as fees divided by card turnover and is shown both as a percentage and as pounds per £100, with the card turnover figure stated and sourced to the statements.
3. Every extra fee named on the statements appears in step 5's list, and any statement line the skill could not classify is listed as "not classified" rather than dropped or absorbed into another total.
4. The pricing structure is named as standard, IC+, IC++ or fixed, with the evidence that says so, or is marked "cannot be determined from the statements" with the question added to the list.
5. Terminal, gateway and PCI agreements are listed separately from the acquiring agreement, each with its counterparty named, and none is assumed to be with the same company.
6. No interchange or scheme fee figure appears in the output unless it was printed on the owner's own statement or on a document the provider supplied, and the regulatory caps are described as caps rather than as the amount being charged.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- Never quote a rate from a provider's website or an advertised offer as though it were comparable to what the owner pays. Card-acquiring prices are not published for most providers: the regulator found that "Acquirers and ISOs do not typically publish their prices for card-acquiring services. Their pricing structures and approaches to headline rates vary significantly." A headline rate with no fee schedule beside it is marketing, not a comparison.
- Never present the interchange caps as the cost of a transaction. They cap one of three components and only for consumer cards issued and acquired in the UK. Treating 0.2% as what a payment should cost produces a number that is wrong and an argument the provider will win.
- Never advise the owner to add a surcharge to recover these costs. Regulation 6A of the Consumer Rights (Payment Surcharges) Regulations 2012 provides that "A payee must not charge a payer any fee in respect of payment by means of" the listed instruments, which include consumer cards.
- Never recommend switching provider, cancelling an agreement or signing anything. This produces the arithmetic and the questions; the decision and the negotiation are the owner's.
- This output is a working document prepared for the owner's accountant or adviser to check before any contract is ended or signed. It reads statements and states arithmetic. It is not advice on your merchant agreement or your terminal lease.

## Built from
- Payment Systems Regulator, "MR18/1.8 Market review into card-acquiring services: Final report", https://www.psr.org.uk/media/p1tlg0iw/psr-card-acquiring-market-review-final-report-november-2021.pdf, November 2021, read 14 September 2026: the three components of the merchant service charge in step 3, the four pricing structures and the 95% figure in step 4, the additional-fee structure in step 5, the POS terminal lock-in in step 6, the pass-through figures in step 8, and the finding that prices are not published, which is the third rule.
- Payment Systems Regulator, "PS22/2: Card-acquiring market remedies: Final decision", https://www.psr.org.uk/publications/policy-statements/ps222-card-acquiring-market-remedies-final-decision/, 6 October 2022, read 14 September 2026: the summary box, trigger message and online quotation tool remedies and the 18-month maximum on terminal contracts, which are what steps 6 and 7 actually ask for.
- Payment Systems Regulator, "The IFR and merchants", https://www.psr.org.uk/psr-focus/card-payments/ifr-and-retailers, read 14 September 2026: the 0.2% and 0.3% interchange caps, the surcharging position, and the acquirer's obligation to give merchants information about the cost of accepting different card brands and categories.
- Regulation (EU) 2015/751, Article 9 (retained in UK law), https://www.legislation.gov.uk/eur/2015/751/article/9, read 14 September 2026: the unblending right quoted in step 7, which is the single most useful sentence in the whole skill for an owner who cannot see what they are paying.
- Payment Systems Regulator, "Market review into card scheme and processing fees", https://www.psr.org.uk/our-work/market-reviews/market-review-into-card-scheme-and-processing-fees/, page last updated July 2026, read 14 September 2026: confirmation that scheme fees kept rising after the period covered by the 2021 report, which is why step 8 plots the direction of travel rather than taking one year as settled.
- The Consumer Rights (Payment Surcharges) Regulations 2012, regulation 6A, https://www.legislation.gov.uk/uksi/2012/3110/regulation/6A, read 14 September 2026: the prohibition behind the surcharging rule.

# card-fees

## You are given
A folder of UK merchant statements for one business, covering up to twelve months of card takings. Formats vary: acquirer PDFs, phone photos, portal CSV exports. There may be several merchant accounts and sites, plus separate paperwork for terminal rental, a gateway or PCI DSS compliance. Read every file before writing anything.

## Produce
Three files in the working folder.

1. `card-fees-lines.csv`, one row per named charge per statement, columns in this exact order:
`merchant_id`, `site`, `provider`, `statement_month` (YYYY-MM), `charge_label_as_printed`, `charge_category` (one of: headline rate, interchange, scheme fee, authorisation fee, minimum monthly service charge, pci compliance, pci non-compliance, chargeback, refund, card-not-present premium, commercial card, non-uk card, terminal rental, gateway, admin or statement fee, not classified), `card_type_if_shown`, `transaction_count`, `transaction_value_gbp`, `rate_pct_as_printed`, `rate_pence_per_txn_as_printed`, `charge_gbp`, `source_file`.
Where the statement does not print a figure, write `not shown on statement`. Never guess a category: anything ambiguous is `not classified`.

2. `card-fees-summary.csv`, one row per merchant account per month plus one `TOTAL` row per account, columns:
`merchant_id`, `statement_month`, `card_turnover_gbp`, `transaction_count`, `average_transaction_value_gbp`, `total_fees_gbp`, `cost_per_100_gbp`, `blended_rate_pct`, `pence_per_transaction`, `non_headline_fees_gbp`, `non_headline_share_pct`, `pricing_structure` (standard, IC+, IC++, fixed or cannot be determined).
`cost_per_100_gbp` is `total_fees_gbp / card_turnover_gbp * 100`. Leave any cell blank that the statements do not support.

3. `card-fees-summary.md`, under 700 words, British English, no em dash characters. It opens with a table of every merchant account, terminal, gateway and PCI agreement: counterparty, start date, term, renewal date and stated exit position, earliest renewal first. Then three headed lists: `The numbers`, `Ask the provider in writing`, `The dates`. Every item names the account, the statements involved, and a pound figure or the words `amount unknown, ask for the figure`.

## Rules
- Type only what is printed. Never estimate a rate, a fee or a turnover figure, and never fill a gap from a provider's website, an advertised offer or your own knowledge.
- Do not write an interchange or scheme fee figure that is not printed on the owner's own statement. The UK caps are caps on one component, not the price charged.
- Every named statement line must appear in `card-fees-lines.csv`. Do not drop a line or fold it into another total.
- Keep merchant accounts, sites and counterparties separate. Do not assume the terminal agreement is with the acquirer.
- Do not propose a surcharge, recommend switching, draft a notice to terminate, or send, sign, cancel or submit anything anywhere.

## Return
The three file paths, the number of statements read, the number of merchant accounts found, the count of rows by `charge_category`, how many landed in `not classified`, and any file you could not read, with the reason.