Card payment fees in 2026: what the regulator's latest decisions mean for small firms

Most small businesses think of card fees as a fixed cost of trading: a percentage comes off every sale and that is that. In 2026 the regulator has been actively looking at who sets those fees and how clearly they are explained. None of this changes your bill overnight, but it gives you good reasons to read your statement this week.

Who actually charges what

When a customer pays by card, several parties take a slice. Your payment provider (the acquirer, such as a card machine company or an online payment service) charges you. Behind it sit the card issuer, which receives an interchange fee, and the card schemes, Visa and Mastercard, which charge scheme and processing fees to acquirers. Those scheme fees are normally passed on to you, either itemised or folded into a single headline rate.

The Payment Systems Regulator (PSR) says that to accept card payments, merchants must pay certain fees, and that it wants merchants, and ultimately consumers, to get a good deal. Its market review of card scheme and processing fees concluded that Mastercard and Visa do not face effective competition, that fees have risen, and that businesses lack clarity on what they will pay to accept card payments.

What the PSR decided in July 2026

On 30 July 2026 the PSR confirmed two directions for Mastercard and Visa, moving the review into its implementation stage:

• Clearer fee information. The schemes must give acquirers clear detail on every fee they are charged: what it is, what triggers it and how it is calculated. The aim is to help businesses check bills and reconcile them with scheme billing. The PSR says this will take 12 months to implement because of the system changes needed.
• Pricing governance. The schemes must consider the interests of the businesses that rely on their services when they make pricing decisions, and keep clear records of their reasoning. The PSR says this takes effect within four months.

A third measure, regulatory financial reporting, is still at the consultation stage. That would require the schemes to report on the financial performance of their UK card businesses. It is not final, so do not treat it as settled.

Notice what these directions are not. They are not a cap on what you pay, and the PSR page announcing them gives no fee percentages. The benefit is transparency: over time, your provider should be able to explain more precisely what is in your bill.

Cross-border card fees

If you sell online to customers in Europe, a separate piece of news matters more. On 15 January 2026 the High Court ruled that the PSR can impose price caps on cross-border interchange fees, rejecting a challenge from Visa, Mastercard and Revolut. These fees apply to card payments between the UK and the European Economic Area, particularly online "card-not-present" purchases.

According to the report on the ruling, consumer debit interchange rose from 0.2% to 1.15% after Brexit, and consumer credit from 0.3% to 1.5%. The regulator estimated that the increases cost UK businesses an extra £150 million to £200 million a year. The level and timing of any cap are still being decided, so there is nothing to claim or switch on yet. If you take online payments across the UK and EEA border, it is worth knowing that this category of fee exists and asking your provider how it treats those cards.

The surcharge rule has not changed

Higher fees tempt some owners to add a card charge at checkout. Under trading standards guidance, businesses cannot add a surcharge for paying by consumer credit, debit or charge card, and the ban also covers similar methods such as PayPal and mobile payments. Commercial cards are exempt from the ban, but the payment method decides this, not the buyer: a sole trader using a personal card is still covered. If a banned surcharge has been paid, it must be refunded.

So the answer to higher fees is not a card supplement. It is to price your services sensibly and make sure you are on a fair deal.

What the mood is

People who run online businesses are not shy about payment fees. On Hacker News, threads about payment processors are mostly frustrated: commenters resent rising costs, opaque terms and minimum fee commitments, and many look for cheaper alternatives. That is a developer audience and mostly about US providers, but the complaint is familiar to UK owners too: the price is hard to compare because it is hard to read.

What to do this week

• Find your last three statements. Work out your effective rate: total fees divided by total card sales. This one number is what you compare against any quote.
• Ask how you are charged. Some providers quote one blended rate for everything, others itemise interchange, scheme and their own margin. Ask which you are on and whether card type (consumer, business, non-UK) changes your rate.
• Look for fixed charges. Monthly terminal rental, minimum monthly fees, PCI compliance fees and early termination charges can matter as much as the percentage for a small turnover.
• Check your contract end date. Switching mid-contract may cost you, so diarise the renewal and ask for a better offer ahead of it.
• If you sell abroad, ask about non-UK cards. Ask whether cards issued outside the UK are charged at a higher rate.
• Keep your own checkout honest. Do not add a card surcharge, and make sure your displayed prices are the price paid.

If you run a takeaway, fees are only part of the picture; our takeaway commission calculator shows what third-party platform commission really costs against your own ordering. And if you are weighing up how your website takes payment, our ecommerce service page explains how we set up checkouts that give you a clear view of your costs.

The bottom line

The regulator's July 2026 decisions should make scheme fees easier to understand and harder to raise without explanation, but the effect will take months, and some of it up to a year, to reach your statement. Nothing here is a reason to wait. Knowing your effective rate today costs you an hour with a calculator, and it puts you in a better position when your provider's next price letter arrives.