Interchange Fees UK 2026: Caps, Cross Border Rates and What You Pay
Every time a customer taps a card in your shop, a small slice of the sale goes to the bank that issued that card. That slice is the interchange fee. You'll never see it as a separate line if you're on a flat rate reader, but it's the single biggest building block of what you pay. Understanding it is the quickest way to tell whether a quote is fair. We checked the rules with the Payment Systems Regulator and the courts' published judgments in October 2026.
What interchange is
When you take a card payment, three main costs are bundled together:
- Interchange: paid by your acquirer to the customer's card issuer.
- Scheme fees: paid to Visa or Mastercard for using their network.
- Acquirer margin: what your payment provider keeps for processing and service.
Interchange is set by the card schemes, not by your provider. Your provider can't negotiate it away. What it can change is its own margin and how it passes the costs on to you.
The UK interchange caps
For most everyday card payments in UK shops, interchange is capped by law. The Payment Systems Regulator (PSR) explains that, under the UK Interchange Fee Regulation, interchange is capped at:
| Card type | Cap |
|---|---|
| Consumer debit and prepaid cards | 0.2% of the transaction value |
| Consumer credit cards | 0.3% of the transaction value |
The caps came in on 9 December 2015 and apply where the merchant, the acquirer and the card issuer are all in the UK. Source: psr.org.uk, checked October 2026.
What that means in pounds
On a £20 debit card sale, interchange can be no more than 4p. On a £20 credit card sale, no more than 6p. So when a flat rate reader charges 1.69% or 1.75% (34p or 35p on £20), most of that isn't interchange. It's scheme fees and the provider's margin.
What isn't capped
The caps have important gaps:
- Commercial cards. Business and corporate cards aren't covered, which is why providers usually charge you more for them.
- Cross border payments. Cards issued outside the UK aren't covered by the UK caps.
- Some card schemes. Three party schemes such as Amex work differently, which is one reason Amex is often priced separately.
The UK and EEA online problem
Before Brexit, the same 0.2% and 0.3% caps covered payments between the UK and the rest of the EEA. Since the EU rules stopped applying to the UK at the end of 2020, that's changed. The PSR says Mastercard and Visa then raised interchange on card not present (online and phone) payments between the UK and EEA, using consumer debit and credit cards, from 0.2% and 0.3% to 1.15% and 1.5%. The regulator found these increases were costing UK businesses £150 million to £200 million a year.
The PSR concluded a price cap was the only effective remedy. Mastercard, Visa and Revolut challenged its power to impose one, and the High Court dismissed their claims in January 2026. The PSR had already dropped a proposed interim cap and is now working on the methodology for a longer term cap. As of October 2026, no new cap level had been set.
So if you sell online to customers in France, Germany or Ireland, expect those payments to cost more than domestic ones.
How interchange shows up on your bill
How you see interchange depends on your pricing model.
| Pricing model | What you see | Typical providers |
|---|---|---|
| Flat rate | One percentage on every card, interchange hidden inside | SumUp, Square, Zettle |
| Blended | One rate for all cards, sometimes with separate rates for business or overseas cards | Dojo, Elavon plans, Worldpay Simplicity |
| Interchange plus | Interchange passed through at cost, plus a fixed margin | Larger acquirer accounts |
| Interchange plus plus | Interchange and scheme fees passed through, plus a margin | Larger acquirer accounts |
Is interchange plus better?
For businesses with a lot of UK consumer debit card payments, interchange plus can be cheaper, because those cards have the lowest interchange. It's also more transparent. The downside is that your statements get more complicated and your monthly cost varies with your card mix. Small businesses often prefer the simplicity of a flat or blended rate.
Worked monthly cost examples
These show roughly how much of your fees is actually interchange, assuming 70% of payments are consumer debit and 30% consumer credit, all UK cards.
| Monthly takings | Maximum interchange | Flat rate at 1.69% | Rest: scheme fees and margin |
|---|---|---|---|
| £2,000 | £4.60 | £33.80 | £29.20 |
| £10,000 | £23.00 | £169.00 | £146.00 |
| £30,000 | £69.00 | £507.00 | £438.00 |
Interchange is £1.40 (0.2% of 70%) plus 90p (0.3% of 30%) per £1,000. The rest of the fee pays for scheme fees and the provider's costs and profit. That's why a business at £30,000 a month has real bargaining power: the provider's margin is large enough to negotiate.
What this means for different businesses
Cafe
Lots of small debit card payments mean low interchange. If you take £10,000 a month or more, ask for a blended or interchange plus quote and compare with your flat rate.
Market stall
Flat rate is usually fine. The amounts are small and simplicity is worth more than shaving a few pence.
Hairdresser
Most clients use personal cards, so a quote with low UK consumer card rates will suit you.
Trades
You may get more business cards from commercial customers. These aren't capped, so check the business card rate on any quote.
Taxi
Airport runs and tourists mean overseas cards. Check the non UK rate as well as the headline rate.
Blended pricing vs interchange plus plus
Providers package interchange in one of two main ways.
Blended (or flat) pricing rolls interchange, scheme fees and the provider's margin into one rate. SumUp, Square and Zettle all work this way. It's simple: you know exactly what each payment costs. The downside is that you pay the same on a cheap UK debit card as on a pricey premium credit card, so the provider builds in a buffer.
Interchange plus plus (IC++) passes interchange and scheme fees through at cost, then adds the provider's own margin on top. Your statement shows each part separately. It's usually offered to larger businesses, and it's often cheaper if most of your customers pay with UK debit cards. It's harder to predict, though, because every card type costs something different.
| Blended | Interchange plus plus | |
|---|---|---|
| Predictability | Same rate every time | Varies by card |
| Transparency | One number | Each fee shown |
| Usually best for | Smaller and newer businesses | Higher volume, debit heavy businesses |
| Where you'll see it | Pay as you go readers | Negotiated merchant accounts |
Scheme fees: the other cost you can't negotiate
Visa and Mastercard also charge scheme fees to the provider. These are separate from interchange and aren't capped. They cover the cost of running the card network and come as a mix of small percentage and per transaction charges. On blended pricing you never see them. On IC++ they show up as their own line. The PSR has looked at scheme and processing fees in a market review, so it's worth keeping an eye on any changes.
Card types that cost you more
Some cards cost more to accept because their interchange isn't capped or is set higher:
- Commercial and business cards. Company credit cards aren't covered by the caps, so expect a higher rate. Paymentsense, for example, quotes 1.99% on business cards against 1.40% on personal cards.
- Non UK cards. Cards issued outside the UK, especially outside the EEA, attract higher cross border interchange.
- American Express. Amex works differently from Visa and Mastercard and usually has its own higher rate. Revolut, for example, charges 1.7% + 2p on Amex.
- Card not present payments. Online and phone payments typically cost more than chip and PIN or contactless, partly because the fraud risk is higher.
Reading your statement
If your provider uses IC++, a typical statement shows lines for interchange, scheme fees and the provider's margin, often split by card type. If you're on a blended rate, you'll just see one percentage, maybe split into personal and business cards. Ask your provider for a breakdown if you're unsure what you're paying. A good provider will explain it without fuss.
How to use this when comparing quotes
- Ask for your card mix. Your current provider can tell you how much was debit, credit, business and overseas.
- Ask for each rate. Get UK consumer debit, consumer credit, business and non UK rates separately.
- Calculate an effective rate. Total fees divided by total takings.
- Watch fixed fees. A 5p authorisation fee matters more than a 0.1% rate difference for small sales.
Our merchant account providers guide explains acquirers in more depth, and our payment gateway guide covers online payments.
FAQs
What is the interchange fee cap in the UK?
0.2% for consumer debit and prepaid cards and 0.3% for consumer credit cards, where the merchant, acquirer and issuer are all in the UK.
Are business cards capped?
No. Commercial cards aren't covered by the caps, so they usually cost merchants more.
Why do EEA cards cost more online?
After Brexit, Visa and Mastercard raised interchange on UK and EEA card not present payments to 1.15% for debit and 1.5% for credit. The PSR is working on a cap, but none had been set as of October 2026.
Can my provider lower my interchange?
No. Interchange is set by the card schemes. Your provider can lower its own margin and change how it prices.
Do flat rate providers pay interchange?
Yes. It's included in their single rate, along with scheme fees and their margin.
When did UK interchange caps start?
On 9 December 2015.
What's the difference between interchange plus and interchange plus plus?
Interchange plus passes interchange through at cost plus a margin. Interchange plus plus also passes through scheme fees separately.
Can I see how much interchange I'm paying?
Only if your provider shows it. On blended pricing, it's hidden inside your single rate. On interchange plus plus, your statement lists it per card type. If you're on a blended rate and taking a decent amount each month, ask a few providers for an IC++ quote and compare it against your last three statements.
Does interchange differ for contactless and chip and PIN?
Both are card present payments, so they're treated the same way under the caps for consumer cards. Online and phone payments are card not present and often cost more.