British shops pay £1.5 billion a year just to get paid

Tap. That is the whole transaction now, half a second between the counter and the card machine.

But inside that beep, a £3.40 coffee becomes a £3.34 coffee. Around 6p leaves the shop before the barista has steamed the milk. Multiply that across every till in the country and you get one of the biggest bills in British retail that almost nobody talks about: retailers paid £1.48 billion in card fees in 2024, more than double what they paid in 2019, according to the British Retail Consortium.

That is the short answer to this article's question. Shops pay to get paid, the price of getting paid has roughly doubled in five years, and the regulator has concluded the market setting that price is not working properly. Here is how the machine works.

Where your 6p goes

Every card payment involves four parties besides you. The shop. The shop's payment company, called an acquirer. The card scheme in the middle, which in Britain almost always means Visa or Mastercard: the two account for 99% of debit and credit card payments in the UK. And your bank, which issued the card in your pocket.

Each takes a slice:

• Interchange goes to your bank. For UK consumer cards it is capped by law at 0.2% of a debit transaction and 0.3% of a credit transaction.

• Scheme and processing fees go to Visa or Mastercard, for running the network.

• The acquirer's margin covers the terminal, the settlement and everything else, plus profit.

A supermarket chain negotiates each slice separately. Your local café does not have that kind of leverage, so it typically pays one blended rate through a provider like Square or Zettle: 1.75% of every in-person payment, or 1.69% with SumUp. On a £3.40 flat white, that is 6p, every single time.

Spread the BRC's £1.48 billion across the roughly 15.6 billion card transactions in its survey and it works out at around 9p per tap.

The bill that doubled

In 2023 alone, the total paid by retailers to banks and card schemes rose by over 25%, an extra £380 million in a single year, taking the bill to £1.64 billion. It eased slightly to £1.48 billion in 2024, but that is still more than twice the 2019 figure, over a period when the number of transactions was falling, not rising. Shoppers made 20.4 billion transactions in 2024, down from 20.9 billion the year before.

So who raised the price? In March 2025 the Payment Systems Regulator finished a three-year investigation and named names. It found Mastercard and Visa had increased their core scheme and processing fees to acquirers by at least 25% in real terms since 2017, costing businesses at least £170 million extra per year. It also found the two schemes do not give businesses clear enough information about what they are actually paying, which stops them negotiating a better deal.

The regulator's core finding was blunter than regulators usually get: Mastercard and Visa do not face effective competition. Cards are what economists call "must take." A shop that refuses them loses the sale, and when your customers cannot walk away, prices tend to go one direction.

The Brexit windfall nobody voted on

There is a second act to this story, and it starts on 1 January 2021.

While the UK was in the EU, an EU regulation capped the interchange on card payments between Britain and Europe at the same 0.2% and 0.3% as domestic ones. When the transition period ended, that cap fell away for cross-border payments. Visa and Mastercard then raised the interchange on UK-EEA online transactions from 0.2% to 1.15% for debit cards, and from 0.3% to 1.5% for credit cards. A fivefold increase, landing on every British online seller with European customers.

The PSR reviewed those rises too and found a lack of competitive constraint had allowed the schemes to push fees to an unduly high level. It proposed a price cap. Then, in October 2025, it decided not to proceed with the interim cap, saying it would move on a permanent cap only once it had built a robust methodology, with a related court judgment not expected before 2026. Meanwhile the PSR itself is being abolished and folded into the Financial Conduct Authority, subject to legislation.

Five years after the fees went up, no cap is in force.

What this means for one café

Take a small independent coffee shop turning over £300,000 a year, nearly all of it on cards. At 1.75%, its annual fee for accepting payment is £5,250.

That is a month of rent in many towns. It is a big slice of a part-time wage. The owner never sees that money, has little room to negotiate it, and can only escape it by turning away nearly every customer who walks in. Cash has handling costs of its own, and it is fading fast at the till besides. There is no free way to be paid, but only one of the options has doubled in price in five years while its providers were found to face no real competition.

The payment rail with no toll booth

This is usually where the story ends: a survey, an angry trade body, a consultation. But it is worth knowing that a payment system now exists where the "must take" problem cannot happen, because there is no company in the middle at all.

Bitcoin moves value directly from the payer to the shop. There is nobody in the middle to collect a scheme fee, an interchange fee or a margin. On its Lightning network, built for exactly this kind of small, instant payment, the network fee on a coffee-sized transaction is typically a fraction of a penny.

The honest caveats matter. Bitcoin's price moves, sometimes sharply, so most UK businesses that accept it use a processor to convert to pounds at the moment of sale, and those processors charge their own fee, generally below card rates but not zero. Few British customers currently offer to pay this way, and accepting it has tax and accounting implications a business should understand first, which we cover in our guide, Bitcoin for Business.

Your café does not need to rip out its card machine. What matters is that for the first time, a rail exists where nobody can raise the toll, because nobody owns the road. Once you know that, the £1.48 billion looks less like a cost of doing business and more like a choice we have collectively not yet questioned. For business owners and professionals thinking seriously about this, the Bitcoin Business Network is where they are having that conversation.

FAQ

How much do card payments cost a UK business?
Small businesses typically pay a blended rate of about 1.69% to 1.75% per in-person transaction through providers like SumUp, Square or Zettle. Larger businesses negotiate the components separately: interchange (capped at 0.2% to 0.3% for UK consumer cards), scheme and processing fees, and the acquirer's margin.

Why did card fees go up after Brexit?
The EU cap on interchange stopped applying to payments between the UK and Europe at the end of 2020. Visa and Mastercard then raised the fee on UK-EEA online transactions roughly fivefold. The regulator called the new levels unduly high, but a cap has yet to come into force.

What is an interchange fee?
The portion of a card fee paid to the bank that issued the customer's card. In the UK it is capped by law at 0.2% for consumer debit cards and 0.3% for consumer credit cards on domestic transactions.

Can a UK business accept Bitcoin?
Yes, it is legal, and processors exist that convert payments to pounds instantly. Businesses should understand HMRC's tax treatment and the practical trade-offs first. Our Bitcoin for Business guide walks through it.

This article is education, not financial advice. Bitcoin's price is volatile and anything involving it should be approached with your own research and professional guidance where appropriate.

Jordan Walker is the founder of The Bitcoin Collective and the Bitcoin Business Network. He organised the UK's first Bitcoin-only conference, hosts The Bitcoin Collective podcast, and writes Bitcoin in a Nutshell, the weekly newsletter read by thousands of UK professionals.