Card Processing
Visa & Mastercard Interchange Fees Explained for UK Businesses
A breakdown of how interchange fees work, recent changes from card networks, and strategies to minimise your payment processing costs.
What Are Interchange Fees?
Interchange fees are the costs that merchants pay to card-issuing banks every time a customer pays by card. They're set by card networks like Visa and Mastercard and form the largest component of your payment processing costs.
How Interchange Works
When a customer pays with their card, the card network facilitates the transaction, the issuing bank receives the interchange fee, and you the merchant pay all these fees through your payment processor.
Current UK Interchange Rates
- Consumer debit: 0.2% (capped by regulation)
- Consumer credit: 0.3% (capped)
- Business credit: 1.5% – 2.5%
- International cards: 1.5% – 3%+
Strategies to Reduce Interchange Costs
- Encourage debit over credit — display debit card logos prominently
- Use Interchange Plus pricing — transparent pricing passes exact rates through
- Optimise transaction data — providing full data can qualify for lower rates
- Review your merchant category code — ensure you're classified correctly
Recent Changes
Visa and Mastercard adjusted their UK-EU interchange rates post-Brexit, significantly increasing costs for cross-border transactions.