How card payment fees work

Every card payment is split several ways before it reaches your bank. Most of those splits are set by banks, card networks and regulators — not by the company that sells you your till. This guide walks through who takes what, why the cost changes from one payment to the next, and how to read a pricing model, ours included.

Six parties in one tap

• The cardholder: your customer, paying with a card, a phone or a watch
• The issuing bank: the customer’s bank, which issued the card and approves the payment
• The card scheme: Visa or Mastercard, which runs the network and writes its rules
• The acquirer: the licensed institution that accepts the payment on your behalf
• The payment service provider (PSP): the technology between your till and the networks. Tapp uses Adyen, which is also the acquirer
• The merchant: you

From the tap to your bank

• Authorisation: within a second or two, the payment travels from the till through Adyen and the scheme to the issuing bank, which checks the card and says yes or no
• Clearing: the approved payments are sent through the scheme, and every party’s fee is worked out
• Settlement: the issuing bank pays, the fees are taken along the way, and the rest reaches your balance at Adyen
• Payout: weekly or monthly, as you choose, Adyen pays your balance into the business bank account you verified

Interchange: the share for the customer’s bank

Interchange is paid to the issuing bank on every card payment. Visa and Mastercard set the rates, and for everyday consumer cards the law caps them. Under the EU Interchange Fee Regulation (2015/751), interchange is capped at 0.2% of the payment on consumer debit cards and 0.3% on consumer credit cards. The UK kept the same caps for domestic payments after Brexit.

• Business and corporate cards: interchange on commercial cards isn’t capped
• Cards from outside the UK and the EEA: the schemes’ own inter-regional rates apply
• Online payments between the UK and the EEA: the gap Brexit opened, below

Once payments between the UK and the EEA were no longer covered by the EU caps, Visa and Mastercard raised the interchange on those online payments from 0.2% and 0.3% to 1.15% for debit and 1.5% for credit. For UK businesses taking EEA cards online, the Payment Systems Regulator concluded in December 2024 that a cap is needed. In October 2025 it decided against an interim cap, and it is still working out the level.

Scheme fees: the networks’ own charges

Scheme fees are what Visa and Mastercard charge for using their networks: authorisation, clearing, cross-border processing, fraud tools and more — many separate line items, none of them capped. They are passed down the chain to the merchant. In its market review of scheme and processing fees, with a final decision in July 2026, the UK Payment Systems Regulator found these fees had risen without effective competition, and required Visa and Mastercard to be more transparent and to govern their pricing better.

Processing, Tap to Pay and wallets

The payment service provider charges for its own work: routing the payment, screening it for fraud, the payment page for online orders, reporting and payouts. Taking a payment with Tap to Pay on a phone can carry its own small fee per payment as well.

Apple Pay and Google Pay aren’t separate payment networks. The phone stores a token that stands in for a real card, so a wallet payment is charged as the card behind it: a debit card in Apple Pay costs what that debit card costs when it’s tapped.

Cards and methods with their own price lists

American Express, Diners Club and JCB grew up as three-party schemes: the scheme itself deals with the cardholder and the merchant, so it sets its merchant pricing directly instead of through interchange. UnionPay sets its own international pricing too, and most JCB and UnionPay cards are issued outside the UK and the EEA, where the caps don’t reach.

PayPal, Klarna, Alipay and WeChat Pay aren’t card schemes at all. Each is its own payment network with its own fees, and pay-later providers price in the credit they give your customer.

Why the cost changes from one payment to the next

• Debit or credit: credit interchange is higher, even under the caps
• Consumer or business: commercial cards aren’t capped
• Domestic or international: a foreign card adds cross-border scheme fees and, outside the capped regions, higher interchange
• In person or online: online payments carry more risk of fraud and usually cost more
• The method: a Visa debit card, an American Express card and a Klarna purchase are three different price lists

Three ways to price it

• Blended rate: one percentage for every card. Easy to read, but the provider has to price in the most expensive cards, so on an everyday debit card you pay for someone else’s premium credit card
• Interchange+ (IC+): interchange is passed on at cost; scheme fees and the provider’s margin are bundled into one markup
• Interchange++ (IC++): interchange and scheme fees are both passed on at cost, and the provider’s margin is shown separately — the model big retailers tend to negotiate for

How Tapp charges

Tapp passes on every processing cost — interchange, scheme fees, Adyen’s processing and Tap to Pay fees — at exactly what it costs Tapp, with nothing added. On top, Tapp charges its own margin: 0.25% of the payment plus a fixed fee of £0.05 per payment in person or £0.08 per payment online. That’s the same for every card and every method, so the only part that varies is the part nobody controls.

The plan is separate: £149 a month, excl. VAT, for the whole restaurant — till, orders, bookings, team and analytics in one app, and no card terminal to rent. The pricing page has the details.

One £20 payment, step by step

An illustrative example: a customer in a UK café pays £20 in person with a UK consumer debit card. The processing figures are examples, not quotes — the real ones depend on the card.

• Interchange, capped at 0.2%: £0.04
• Scheme fees and Adyen’s processing, for example: £0.06
• Tapp’s margin, 0.25%: £0.05
• Tapp’s fixed fee in person: £0.05
• What you keep: £19.80

Paid with a business credit card instead, the same £20 would carry more interchange, because commercial cards aren’t capped. Tapp’s part would still be £0.10.

Seeing it in Tapp

Your takings are paid out weekly or monthly, as you choose, to the business bank account you verified. The Money tab lists every payout with its date and status, and the owner can tap Send report to get the payout history for a chosen period by email.