Payment processing fees can feel confusing at first. You see small percentages and flat charges, but it’s not always clear what you’re actually paying for or why the totals add up the way they do.

This guide breaks down payment processing fees in plain terms, so you know what to expect and how to keep costs under control.

What are payment processing fees

Payment processing fees are the charges you pay every time a customer pays you by card or online. They cover the cost of moving money securely from the customer to your business.

These fees are usually taken automatically before the money reaches your account.

The main types of fees

Most payment processing costs fall into a few categories.

Transaction fees
This is the most common charge. It’s usually a percentage of the sale, sometimes with a small fixed amount added on.

Monthly or platform fees
Some providers charge a monthly fee for access to their system, reporting tools or support.

Terminal or equipment fees
If you take payments in person, you may pay for a card reader through a one off cost or monthly rental.

Refund and chargeback fees
If a customer disputes a payment or asks for a refund, extra fees can apply.

Why fees vary

Payment processing fees aren’t the same for every business.

They depend on:

• Whether the payment is in person or online
• The type of card used
• Whether the card is UK or international
• Your sales volume and average transaction size

Online and international payments usually cost more because they involve extra checks.

How fees affect your pricing

Fees might look small per transaction, but they add up.

If you sell low value items, fees take a bigger slice of each sale. If you sell higher value services, percentages matter more.

It’s worth factoring fees into your pricing so they don’t quietly eat into your margins.

Ways to keep fees under control

You can’t avoid fees completely, but you can manage them.

It helps to:

• Choose a provider that fits how you sell
• Review fees as your business grows
• Avoid unnecessary refunds and chargebacks
• Understand which payment methods cost more

What worked when you started might not be right forever.

Understanding statements and reports

Payment statements often bundle fees together, which can make them hard to read.

Take time to:

• Check how fees are listed
• Compare gross sales to what lands in your account
• Look for patterns or unexpected charges

If something doesn’t make sense, ask your provider to explain it.

Payment processing fees aren’t just a cost of doing business. When you understand them, you can make better decisions and protect your profit without complicating the way customers pay.