A Fee You’ve Never Heard Of
Scheme fees are the part of your card processing bill most business owners have never heard of by name, which is exactly the problem the UK’s Payment Systems Regulator set out to investigate.
Why Scheme Fees Aren’t Capped
Every time a customer taps or inserts a card, a small fee goes to whichever network processed it, Visa or Mastercard in the overwhelming majority of UK cases. Together the two schemes handle 99% of UK debit and credit card payments, a level of dominance the PSR has explicitly flagged as a competition problem, since a merchant effectively has no real alternative supplier to switch to if either scheme raises its prices.
What The Regulator Found
That matters because, unlike interchange, scheme fees aren’t capped by regulation. The PSR’s 2024 market review found that scheme and processing fees charged to UK acquirers rose substantially between 2014 and 2018, and crucially, that a significant share of that rise couldn’t be explained by any change in transaction volume, transaction value, or the mix of cards being used. In plainer terms, prices went up for reasons other than the schemes doing more work.
The Brexit Cross-Border Spike
The clearest recent example is what happened to cross-border interchange after Brexit. Before January 2021, UK-EEA card transactions were covered by the same 0.2%/0.3% EU caps as domestic ones. Once the UK left the EU’s regulatory framework, those caps stopped applying to UK-EEA transactions, and Visa and Mastercard raised the rates roughly fivefold, to around 1.15% on debit and 1.5% on credit for card-not-present, largely online, transactions. The PSR estimates this cost UK businesses an additional £150 to £200 million in 2022 alone, and it’s now consulting on a price cap remedy specifically targeting these cross-border rates.
What You Can Actually Do
None of this is something an individual small business can negotiate away directly, scheme fees are set centrally and passed through by every acquirer. What you can do is understand how much of your bill they actually represent. If your provider quotes a single blended rate, ask for a breakdown, or move to interchange-plus pricing, where scheme fees and interchange are shown separately from your provider’s own markup. If a meaningful share of your card sales are online orders from EU customers, the cross-border rate specifically is worth flagging with your provider now, since it’s the fastest-moving part of the fee structure.
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