As peak trading approaches and costs keep creeping up, many UK merchants ask the same question: can we simply add a charge when a customer pays by card? The short answer is that, for most consumer card payments, the law says no. Before you change a price list or a checkout, it is worth being clear on what is allowed, what is not, and what you can do instead to protect your margin.

Where the UK rules stand

Under the Payment Services Regulations 2017, UK businesses are generally prohibited from charging consumers extra for paying with a consumer credit or debit card. The ban was widened in January 2018 to cover the whole range of everyday consumer payment methods, not just cards. In practice, that means a "card handling fee" added at the till or at online checkout is likely to be unlawful when the customer is a consumer paying with a consumer card.

The rules are more nuanced for business-to-business sales and for commercial cards, so the safest approach is to check the current wording on GOV.UK or take legal advice for your specific situation. We are a payments provider, not a law firm, and this article is general information only.

Why the temptation is growing

Card processing fees are a real line item, and the cost of accepting cards sits on top of rent, wages, energy and stock. A merchant taking £30,000 a month by card can easily be paying several hundred pounds in fees, and statements that mix interchange, scheme fees, monthly charges and PCI fees make it hard to see what is negotiable. That frustration is understandable, but a surcharge carries risks of its own:

  • Enforcement risk: charging a prohibited surcharge can lead to complaints and action from trading standards or regulators.
  • Customer trust: a visible card fee at the final checkout step is a well-known cause of abandoned baskets and bad reviews.
  • Contract risk: card scheme rules and your merchant agreement may also restrict how you present card acceptance, so check both.

Better ways to protect your margin

Rather than passing the cost to the customer, start with the cost itself. Most merchants have more room to move than they think, and the work is mostly reading your statement carefully:

  • Audit every fee line: separate the processing rate from monthly, terminal, PCI and statement fees, then challenge each one. Our guide on cutting processing costs walks through the usual suspects.
  • Check your pricing model: if your volume is growing, IC++ pricing can be more transparent than a blended rate, because you see interchange and scheme fees separately.
  • Build the cost into your prices: a modest, across-the-board price adjustment is lawful and treats every customer the same, unlike a charge that singles out card users.
  • Offer lower-cost payment options: open banking and Pay by Bank are growing, and a clear, optional discount for choosing them is a commercial decision for you to weigh up.

How Monek approaches it

Monek is an FCA-regulated payment provider (FRN 920628) with pricing from 0.99% blended, IC++ pricing for higher-volume businesses and next-day settlement, so your cash arrives sooner and your fees are easier to understand. The same UK payment gateway covers terminals, the Virtual Terminal, Pay by Link and our free WooCommerce plugin, with native Xero integration to keep reconciliation simple. Terms depend on your business and risk profile, so the practical step this week is to put your latest statement next to a quote. If you would like a no-obligation comparison, talk to our team and we will go through your fees line by line.