Introduction
Card payment processing is a necessary cost of doing business—but choosing the wrong pricing model can eat into your profit. Most UK merchants are offered either a fixed rate or a blended rate or a variable (interchange-plus) rate. Fixed rate is by far the most likely
So, which is better? And what do real businesses actually pay? Let’s break it down with real-world examples from SMEs we’ve worked with.
What Are Fixed Rates?
A fixed rate means you pay a set percentage for every card transaction, regardless of card type or transaction size. It’s simple and predictable—but not always fair.
Pros:
- Easy to understand
- Good for businesses with low volume or high variability
Cons:
- Can be inflated to cover risk
- You might overpay if you mostly take debit cards
What Are Blended Rates?
A fixed percentage rate is applied to each card type i.e. debit, credit, corporate etc. the costs associated with each card type are included in the “blended” rate for each card type.
Pros:
- Easy to understand
Cons:
- May not be suitable i.e. a very low rate may be applied to a card type that you rarely take, so there’s little benefit and vice versa.
What Are Variable Rates?
Also known as interchange-plus, variable rates pass on the true cost of each transaction (interchange + scheme fees + a fixed margin).
Pros:
- Transparent
- Fair—you pay for what you actually use
Cons:
Statements are more complex
- Some providers still sneak in hidden margins, particularly Scheme Fees. Interchange Fees for all cards can be found on the Visa and Mastercard websites. Scheme Fees are not available for public viewing.
- Not generally available.
Real-World Example:
Case Study: Independent Café in Leeds
- Monthly revenue: £12,000
- 70% debit card usage
|
Provider |
Pricing Model |
Effective Rate |
Total Monthly Fee |
| Big Brand A | Fixed (1.75%) | 1.75% | £210 |
| Paynetworx | Variable (avg. 1.1%) | 1.1% | £132 |
Savings: £78/month or £936/year
So, Which Is Better?
If simplicity matters and your transactions vary wildly, fixed could suit you. But if you want fair, accurate pricing and your volume is consistent, either a blended or variable rate often saves you money.
The PayNetWorx Advantage
We offer interchange-plus pricing with full transparency. Our clients always know:
- What they’re paying
- Why they’re paying it
- How it compares to market rates
We’re here to guide—not upsell.
Send us your statement and we’ll show you exactly what you’re paying—and what you could be saving. If we can help you we will: if we can’t help you we’ll tell you.
