Card Processing Fees: What Are Retailers Really Paying?

When a customer pays by credit or debit card retailers incur a fee - often referred to as a ‘merchant service charge.’ This fee typically includes interchange fees (paid to the cardholder’s bank), payment processor fees, and additional service charges.

In the UK, the average cost to retailers for processing card payments ranges from 0.3% to 0.9% for debit cards, while credit cards can attract fees of around 0.7% to 1.5% per transaction. For small businesses, these costs can be even higher. 

According to the British Retail Consortium (BRC) total card fees fell slightly in 2024 compared with 2023. However, at £1.48 billion, the fees paid by retailers have more than doubled since 2019.²

Beyond basic transaction fees, there are also monthly service charges, terminal rental fees, and potentially higher rates for premium or foreign-issued cards. For smaller transactions, these fees can represent a significant proportion of the sale.

The Value of Accepting Cash: More Than Just Loose Change

While digital payments offer convenience, cash remains a viable and sometimes preferable option for many retailers. Unlike card transactions, cash payments do not incur per-transaction processing fees or hidden charges. This can translate into real savings, particularly for businesses with high transaction volumes or those selling low-value items.

Cash usage still remains an important payment method for many customers, accounting for almost a fifth (19.2%) of all transactions.³ Although this represents a decline from previous years, it still accounts for billions of transactions and remains the preferred method of payment for many consumers, particularly in rural areas and among older demographics.

Cash also offers immediate liquidity - funds are available on the spot, with no waiting for settlement periods or risk of chargebacks. This can help retailers manage their cash flow, especially important for small businesses.
 

Benefits of Cash Recycling for Retailers

Cash recyclers can be used at the point-of-sale (POS), or in the back office for streamlining and improving any cash handling activities. Cash recycling solutions automate this process, optimising all cash handling activities and enhancing the customer experience.

The benefits include:

• Time Savings: Automated cash handling reduces time spent on manual cash handling activities and trips to the bank.
• Enhanced Security: Less cash in transit and on premises reduces the risk of theft and shrinkage.
• Improved Efficiency: Staff and colleagues can focus on customer service rather than cash management tasks.
• Reduced Banking Fees: Fewer cash deposits and withdrawals mean lower banking charges.

Cash as a Strategic Choice

For many retailers, accepting cash is not just about customer service. It is a strategic decision that protects profit margins and supports operational flexibility. While the increase in digital payments is unlikely to reverse, cash offers a stable, inclusive, and cost-effective alternative.

By offering both card and cash options, retailers can provide payment choice to their customers, avoid unnecessary fees, and ensure any payment is not lost - a lesson made clear during recent high-profile digital payment system failures.

While card payments bring convenience and speed, accepting cash will always remain a valuable option. 

To learn more about how GLORY’s cash recycling and payment solutions can help your business, get in touch with us today.

References

1. UK Finance website - October 2025

2. & 3. British Retail Consortium Website – December 2025