Why a few pence can change the result

Imagine two fictional quotes on £10,000 of monthly card sales. Quote A charges 1.5% plus 20p per payment. Quote B charges 1.4% plus 25p. Neither includes a monthly fee in this example.

The lower percentage is more expensive for the business taking many small payments, equal at the middle example and cheaper for the business taking fewer large payments. These are calculated examples, not current offers from named providers.

A café, a convenience shop and a furniture retailer should therefore avoid borrowing each other's cost assumptions. Their monthly turnover might match while their transaction counts are very different. Ask a salesperson to show the calculation using your own average sale.

When does a paid lower-rate plan make sense?

SumUp's published monthly Payments Plus price provides a useful example. On eligible domestic transactions, the difference between 1.69% and 0.99% is 0.70 percentage points. Dividing £19 by 0.007 gives approximately £2,714.29 of eligible monthly turnover to offset the subscription in processing savings alone.

That calculation assumes those transactions qualify for the lower rate and compares the monthly subscription, not an annual-payment offer. It excludes hardware and any other differences. Premium, international and Amex transactions do not generate that particular rate saving.

At £3,000 of entirely eligible turnover, the simplified comparison is £50.70 on 1.69%, versus £29.70 processing plus £19 subscription, or £48.70. The difference is just £2 for that month. Do not turn a narrow result into a claim that a plan is always better.

Run the calculation across quiet and busy months. If only half of your turnover qualifies, you need to use that eligible half rather than the full amount. Check cancellation and renewal terms before assuming you can switch plans whenever trading slows.

Separate equipment costs from processing

Buying a device outright and paying monthly for it create different cash-flow commitments. Neither is automatically better. A purchase may have a higher first payment; a rental arrangement may spread cost but continue for a minimum term.

For a fictional £180 device used for 24 months, the simple allocation is £7.50 a month. That is a budgeting comparison, not a statement that the provider bills monthly or that the device will last exactly two years. Accessories and replacement needs still matter.

Our buying or renting guide can help you consider the equipment decision. Ask who owns the hardware, what happens if it fails and whether returning it ends the payment obligation.

Online and telephone payments need their own prices

Do not apply an in-person rate to all your sales. A provider may price an online checkout, a manually entered card payment and a card tapped on a terminal differently. Ask for the channels you use now and any you expect to add.

A small business taking deposits remotely and balances in person should model both parts. Include any gateway or software charge required for the remote payment route. Our payment processing companies guide provides a broader starting point if your needs extend beyond a reader.

Refunds and disputes also deserve a question. Ask what happens to the original processing fee after a refund and whether separate charges can apply. Get the answer for the specific service and agreement, rather than relying on a general brand comparison.

Check tax treatment and settlement timing

Keep each quote's tax treatment visible. Hardware and software prices may be presented excluding VAT, while payment-service charges can have different treatment. Do not add a blanket 20% to every line or assume all quoted figures include tax. Ask for an itemised quote and confirm the treatment with your bookkeeper where necessary.

Also distinguish a low processing charge from access to your money. Ask where settlement arrives, when it becomes available and whether a faster option costs extra. Weekend and bank-holiday timing can matter when stock purchases or wages fall due.

Model these practical requirements alongside the fee total. A small headline saving may not be useful if the settlement arrangement creates extra work or fails to match your normal cash-flow needs.

What to send a provider for a meaningful quote

Prepare three recent statements where available, your monthly card turnover and transaction count, and a description of how you sell. Identify seasonal changes, overseas customers and any need for multiple devices or locations.

Ask the provider to return the equipment list, full rate schedule, monthly charges and contract terms together. Request a first-year total based on your figures and an explanation of what changes after an introductory period.

Keep a comparison sheet with the same headings for every offer. If a quote omits something, leave it marked as unknown until the provider answers. Treating an unknown charge as zero can make an incomplete proposal appear cheaper than a transparent one.

Frequently asked questions

Is the lowest percentage the cheapest deal?

Only if the other costs and conditions support that conclusion. Per-payment charges, subscriptions, hardware and your card mix can reverse the result. The worked examples above show why you need a monthly total.

Can I negotiate card processing fees?

Some providers offer tailored pricing. Ask whether your business qualifies, provide realistic figures and compare the written proposal with public tariffs. Do not assume a negotiated percentage will offset a higher equipment or service charge.

How should I compare a seasonal business?

Calculate a representative quiet month and a busy month, then build an annual estimate. Include fixed charges during months with little or no trading. Check whether any minimum commitment prevents the flexibility you expect.

What is the next step?

Use our card payment cost calculator with your own figures, then request comparable offers through our card machine comparison page. Choose the setup that meets your requirements at a clear, affordable total.