What a card payment actually costs a small shop

The rate is not the price

Ask a shopkeeper what they pay to take a card and you will usually get one number: 1.4%, or 1.75%, or whatever was written on the brochure. Then the statement arrives and the takings do not match. The rate is real, but it is one line out of five, and it is rarely the biggest.

Here is what the other four are.

Authorisation fees

A few pence charged every time a card is presented, whether the sale is $4 or $400. On a coffee shop doing two hundred small sales a day this is often larger than the percentage. A shop taking $900 a day over three hundred cards can pay more in authorisation than in rate.

The rate bands nobody mentions

The headline rate applies to a standard consumer debit card tapped in person. A business card, a credit card, a card issued outside the country, a payment taken over the phone — each of those falls into a different band, and the bands are usually two to four times the headline. A shop near a station or a tourist street can find half its takings priced off the brochure.

Terminal lease

Usually $15 to $30 a month, on a contract of three to five years, and frequently sold separately from the payment account by a different company. The lease keeps running if you change provider. A lot of shops discover this only when they try to leave.

The monthly minimum, the statement fee, the PCI fee

Small amounts, $5 to $25 each, that exist because they can. The PCI fee in particular is often charged as a penalty for not completing a questionnaire nobody told you about.

How to work out your real number

Take three months of statements. Add every charge, not just the percentage line. Divide by total card takings. That figure is what you pay, and for most independent shops it lands between 2.1% and 3.4% even when the brochure said 1.5%.

What to do with the number

Once you have it, you can compare. A provider that quotes one rate with no authorisation fee, no lease, no minimum and no band for business cards is either cheaper or it is not, and you can tell in an afternoon rather than after a year.

Tillio charges 1.6% on the free plan and nothing else. We publish that because the comparison is the whole argument.