Every small business that takes cards knows the feeling: you sell something for 100, and 97-and-something arrives in the bank. The difference just… goes. Ask what you're paying for and you'll get a tangle of jargon — interchange, scheme fees, acquiring, gateways — that seems designed to end the conversation. It isn't actually complicated. Here's the whole system in plain English, so the next time you look at your statement, you know exactly where your money went and whether the deal you're on is fair.
Three parties take a slice of every card sale
1. The customer's bank (interchange)
The bank that issued your customer's card takes the first cut, called interchange. It's usually the largest component, and its rate varies with the card type: a basic debit card costs a lot less than a premium rewards credit card or a corporate card. You can't negotiate interchange — it's set by the card networks — but it matters because it's the "raw cost" underneath every pricing model you'll be offered.
2. The card network (scheme fees)
Visa, Mastercard, and their peers charge scheme fees for running the rails the payment travels on. These are small percentages, but they're always there, on every transaction.
3. Your payment provider (the markup)
Everything else — the acquirer that banks the money, the gateway or terminal that captures the card, the provider that packages it all up for you — lives in the markup. This is the only part of the fee that's genuinely up for negotiation, and it's where providers differ enormously.
The two pricing models you'll be offered
Flat-rate pricing gives you one blended percentage for everything. It's simple and predictable, and for small or newer businesses that simplicity is worth a lot. The trade-off: the flat rate is set high enough to cover the provider's worst case, so on cheap transactions (like ordinary debit cards — most Caribbean and UK high-street sales) you're often paying well above the true cost.
Interchange-plus pricing passes through the real interchange and scheme fees, plus a stated markup. It's more transparent and usually cheaper at volume, but your statement becomes more complex and your costs vary month to month.
Neither is a scam and neither is a gift — but you should know which one you're on, and you'd be surprised how many business owners don't.
The fee you can't explain is the fee you can't challenge. Transparency isn't a nicety in payments — it's the whole negotiation.
The fees hiding around the edges
The headline rate is only part of the picture. When comparing providers, look for:
- Monthly and terminal fees — fixed costs that hit hardest in slow months.
- Authorisation fees — a few pence/cents per transaction that add up on small-ticket sales.
- Chargeback fees — charged when a customer disputes a sale, win or lose.
- PCI compliance (and non-compliance) fees — sometimes billed monthly, sometimes as penalties.
- Settlement timing — not a fee, but money that takes days to arrive is a cost to your cash flow all the same.
- Exit fees and contract lock-ins — the cost of changing your mind later.
How to read your own statement
Take last month's processing statement and answer three questions. What was your effective rate — total fees divided by total card sales? Which pricing model are you actually on? And what did you pay in fixed fees regardless of sales? Those three numbers are your negotiating position, whether you use them with your current provider or a new one. If you can't answer them from the statement, that opacity is itself a red flag.
Why we're telling you this
NovisPay is being built on a simple conviction: small businesses deserve payment pricing they can read without a translator. We're pre-launch — no sales pitch here, just the education we wish every merchant had before signing anything. If payments that make sense to normal humans sound like your kind of thing, join the waitlist at novispay.co.uk and be first to know when we go live.