Aisha runs an online business doing about £20,000 in monthly sales — a mix of one-off purchases and a small recurring product line. Her card processor's published rate is 2.9% plus 30p per transaction. She sees the line item on every payout statement, recognises it as the cost of taking card payments, and does not think about it beyond that.
If she did the math, the annual figure would surprise her. The percentage and the per-transaction fee combine in ways that are not obvious until they are written out — and the total, on a business her size, is large enough that any other cost line would have triggered a procurement review years ago.
The math on a £20,000-a-month online business
The published rate for online card processing from major providers — Stripe, Square, and the larger gateway players — is 2.9% plus 30p (or roughly 30¢) per transaction. This is the industry-standard rate published openly by major card processors. It is not a hidden number; it is just one most merchants do not multiply out.
Take Aisha's business. £20,000 in monthly sales, spread across roughly 800 transactions in a month with an average ticket of £25.
- The percentage component: 2.9% of £20,000 = £580 per month
- The per-transaction component: 800 × 30p = £240 per month
- Combined: £820 per month in card processing fees
- Annualised: £9,840 per year
That is for a business with £240,000 in annual revenue. The card processing line, at roughly 4.1% of total revenue once the per-transaction fee is averaged in, is one of her largest controllable costs. It is larger than her annual marketing budget, in many cases. It is certainly larger than the fees she pays for any of her other software tools combined.
And these are illustrative figures on the assumptions above — a different volume, ticket size, or transaction count will give a different total. The point is the shape of the math, not the specific number. For most online businesses, the headline percentage hides the practical annual cost.
What the percentage is actually paying for
It is worth understanding what the 2.9% covers, because it explains why the rate is structured the way it is. Card networks operate a layered system — issuing bank, acquiring bank, network (Visa, Mastercard, Amex), and processor — and each layer takes a share. The interchange fee, paid to the customer's issuing bank, is the largest single component. Network fees go to Visa or Mastercard. Acquirer and processor markups make up the rest. The merchant's processor wraps all of this into a single advertised rate.
The percentage also funds the chargeback system. Card networks guarantee buyer protection, which means processors absorb the risk of disputes — and price that risk into the rate. A merchant who never has a chargeback still pays for the chargeback infrastructure, because the rate is calibrated across all merchants in the network's risk pool.
For a £20,000-a-month online business, card processing fees at the industry-standard 2.9% + 30p rate work out to roughly £820 a month — close to £10,000 a year in transaction costs alone.
— Illustrative example using industry-standard rates published by major card processors
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