What "1.4%" actually costs you on a £5.90 pint
Card pricing is quoted as a percentage and charged as a percentage plus a fixed fee. At food hall basket sizes the fixed fee is most of the bill. Real numbers.
Every card rate you will be quoted has two parts: a percentage and a fixed fee per transaction. The marketing leads with the percentage. On a food hall basket, the fixed fee is usually the larger half.
The arithmetic
Take a common UK in-person rate of 1.4% plus 10p. Run it against baskets a food hall actually sees:
| Basket | Fee | Effective rate |
|---|---|---|
| £5.90 — one pint | 18.3p | 3.09% |
| £11.10 — a round of two | 25.5p | 2.30% |
| £25 — a family ordering food | 45.0p | 1.80% |
| £45 — a big round | 73.0p | 1.62% |
The headline says 1.4%. The single pint costs 3.09% — more than double. Online rates are typically 1.5% plus 20p, which takes the same pint to 4.89%.
Why this matters more at a food hall than at a restaurant
A restaurant with a £60 average spend can treat the fixed fee as a rounding error, because at £60 it is. A food hall has a bar, and a bar sells single drinks all night. Your average basket is small and your transaction count is enormous, which is precisely the shape that makes the fixed fee dominate.
So when you model card costs, do not multiply annual turnover by the headline percentage. Multiply your transaction count by the fixed fee, add the percentage on turnover, and look at what comes out. For a lot of halls the two halves are roughly equal, and only one of them was in the quote.
Questions worth asking a supplier
- What is the fixed fee per transaction, in pence, in person and online?
- Is the rate the same for commercial cards and non-EEA cards? It usually is not.
- Is there an authentication fee on top of the online rate?
- What does a refund cost? Some providers keep the fee.
- What is the rate on a tab or pre-authorisation, if you run them?
A note on where POS companies make money on this
Some POS suppliers resell card processing at the underlying provider's list price and make nothing on it — the margin is elsewhere, in the software or the hardware or the online channel. Others add a spread. Neither is wrong, but they are very different businesses, and it is worth knowing which one you are talking to: a supplier whose margin is in your card volume has an interest in your card volume that a supplier charging for software does not.
HelchPOS does not process cards at all. Card is recorded against your own external terminal, so you keep whatever rate you negotiated with whoever you negotiated it with, and we have no view of it. That is a deliberate limitation as much as a feature, and it is on our comparison page as one of the rows we lose.