Total Cost of Acquiring calculator
The headline rate is one of six line items. Real Total Cost of Acquiring (TCA) blends MSC, monthly fee, per-transaction pence, chargeback fee, scheme fee and refund leakage. This page lays out the formula and runs worked examples for the five mainstream UK acquirers (Dojo, SumUp, Square, Stripe, Adyen) at three volume bands.
The six line items
Read these in order. Acquirers price differently on each line, which is why headline-rate comparisons mislead.
- Merchant Service Charge (MSC). The percentage of every transaction the acquirer keeps. Either blended (a single rate, regardless of card type) or interchange-plus (interchange pass-through plus a fixed markup, e.g. IC + 0.3%). Blended is administratively simpler; interchange-plus is cheaper above ~£25k monthly volume because consumer-debit interchange is regulated at 0.2% under UK Interchange Fee Regulation.
- Monthly fee. Hardware rental, gateway fee, PCI fee, statement fee, dormancy fee, minimum monthly volume penalty. Add these to one annualised number. £15 to £35 monthly is normal in 2026; "free" terminal deals usually have a £20 monthly fee buried somewhere.
- Per-transaction flat fee. A fixed pence amount per transaction (e.g. Stripe's 20p plus 1.4% UK card-present rate). Hits hardest on small-ticket businesses; a 20p flat fee is 2.5% on a £8 coffee but 0.04% on a £500 dental treatment.
- Chargeback fee. £15 to £35 per chargeback in 2026, win or lose. UK acquirers do not refund the chargeback fee even when you successfully defend the dispute. Apply only if your trade has chargeback exposure.
- Scheme fee. Visa and Mastercard's own cuts. 0.05% to 0.20% on UK domestic volume in 2026. Blended-rate acquirers absorb these into the headline rate; interchange-plus acquirers pass them through line by line.
- Refund leakage. Most acquirers do not refund the original MSC when you process a refund. Some charge an extra refund fee on top. For trades with refund rates above 5%, model this as 0.05% to 0.15% added to TCA.
The TCA formula
Annual TCA in pounds equals:
TCA = (V × R%) + (M × 12) + (T × P) + (C × CF) + (V × S%) + (V × Refund%)
Where:
- V = annual card volume in pounds
- R% = MSC rate (blended or interchange-plus markup)
- M = monthly fee in pounds
- T = annual transaction count
- P = per-transaction flat fee in pounds (e.g. £0.20)
- C = annual chargeback count
- CF = chargeback fee in pounds
- S% = scheme fee percentage
- Refund% = refund leakage as a percentage of annual volume
Express TCA back as a percentage by dividing by annual volume V. That number is comparable across acquirers; the headline rate is not.
Worked example 1: small café, £4 average ticket, £4k monthly volume
Annual card volume £48k, annual transaction count ~12,000, no chargebacks, no refunds material.
| Acquirer | MSC | Monthly | Per-tx flat | Annual TCA £ | TCA % |
|---|---|---|---|---|---|
| SumUp Solo | 1.69% | £0 | £0 | £811 | 1.69% |
| Zettle Reader 2 | 1.75% | £0 | £0 | £840 | 1.75% |
| Square Terminal | 1.75% | £0 | £0 | £840 | 1.75% |
| Dojo Go | 1.6% blended | £20 | £0 | £768 + £240 = £1,008 | 2.10% |
| Stripe Reader S700 | 1.4% | £0 | £0.20 | £672 + £2,400 = £3,072 | 6.40% |
SumUp wins. Stripe's 20p per transaction destroys the headline rate at small-ticket volumes. Dojo's £20/month at low volume erodes the rate advantage. The lesson: small-ticket businesses must run TCA, not headline rate.
Worked example 2: mid-sized restaurant, £40 average ticket, £15k monthly volume
Annual card volume £180k, annual transaction count ~4,500, modest chargeback rate (10/year at £20 each), refund rate 1.5%.
| Acquirer | MSC | Monthly | Per-tx | Other | Annual TCA £ | TCA % |
|---|---|---|---|---|---|---|
| SumUp Solo | 1.69% | £0 | £0 | £200 cb + £270 refund | £3,042 + £470 = £3,512 | 1.95% |
| Square Terminal | 1.75% | £0 | £0 | £200 cb + £270 refund | £3,150 + £470 = £3,620 | 2.01% |
| Dojo Go | 1.5% blended | £20 | £0 | £200 cb + £270 refund | £2,700 + £240 + £470 = £3,410 | 1.89% |
| Stripe Reader S700 | 1.4% | £0 | £0.20 | £200 cb + £270 refund | £2,520 + £900 + £470 = £3,890 | 2.16% |
| Adyen (negotiated) | IC + 0.30% | £25 | £0 | est interchange 0.4% + scheme 0.1% | ~£1,440 + £300 + £470 = £2,210 | 1.23% |
At this volume, the order is Adyen interchange-plus, Dojo blended, SumUp, Square, Stripe. Dojo's £20 monthly is now overwhelmed by the 0.2% rate advantage. Adyen wins materially but takes negotiation effort and a 12-month contract.
Worked example 3: high-volume retailer, £85 average ticket, £80k monthly volume
Annual card volume £960k, annual transaction count ~11,300, chargeback rate 0.4% (45/year at £25 each), refund rate 4%.
| Acquirer | MSC | Monthly | Other | Annual TCA £ | TCA % |
|---|---|---|---|---|---|
| SumUp Solo | 1.69% | £0 | £1,125 cb + £3,840 refund | £16,224 + £4,965 = £21,189 | 2.21% |
| Dojo Go | 1.4% blended | £25 | £1,125 cb + £3,840 refund | £13,440 + £300 + £4,965 = £18,705 | 1.95% |
| Stripe (custom) | 1.2% + 10p | £0 | £1,125 cb + £3,840 refund | £11,520 + £1,130 + £4,965 = £17,615 | 1.83% |
| Adyen IC+ | IC + 0.20% + £0.10 | £35 | interchange 0.45% + scheme 0.12%, £1,125 cb + £3,840 refund | ~£7,392 + £1,130 + £420 + £4,965 = £13,907 | 1.45% |
Adyen wins by ~50 basis points (£4,798/year vs Dojo). Above £80k monthly, the question stops being which blended rate and starts being which interchange-plus partner. Stripe's custom-pricing offer (negotiable above £100k monthly) competes with Adyen on rate but loses on PoS-integration depth.
When to switch pricing model
The crossover thresholds, in 2026 UK pricing:
- Below £4k monthly: no-contract beats every bundled deal. SumUp, Square or Zettle on flat 1.69% to 1.75%.
- £4k to £8k monthly: mixed; depends on ticket size and chargeback exposure. Run TCA both ways.
- £8k to £25k monthly: Dojo blended typically wins. Adyen interchange-plus competitive if commercial-card mix is high.
- £25k to £80k monthly: interchange-plus from Stripe, Adyen or a tier-one acquirer beats blended on TCA.
- Above £80k monthly: always interchange-plus. Negotiate the markup directly.
The £25k annual / £4k monthly threshold (a separate question)
Two distinct annual numbers come up in UK acquiring conversations. Avoid mixing them up:
- £25k annual card volume (~£2k monthly): the practical "is a card terminal worth it at all?" threshold. Below this, Tap to Pay on iPhone or a phone-paired reader is usually enough. A countertop terminal plus monthly fees does not pay back.
- £100k annual / £8k monthly: the practical "should I move from no-contract to bundled blended?" threshold. Below £8k monthly, no-contract wins. Above, Dojo blended usually wins.
- £300k annual / £25k monthly: the "should I move from blended to interchange-plus?" threshold. Above this, the interchange-plus saving is material.
Five sources of error in DIY TCA models
- Forgetting hardware rental. "Free" terminals usually carry a £15-£25 monthly rental embedded in the contract.
- Forgetting AMEX surcharge. AMEX runs 1.5% to 2.5% above standard MSC; if you accept AMEX, model that volume separately.
- Forgetting cross-border interchange. Until the PSR cross-border cap appeal resolves, EEA-issued cards processed in the UK carry 1.15% to 1.50% interchange.
- Forgetting MCC-specific interchange. Some merchant category codes (charity, government, fuel) get reduced interchange. Some (high-risk, gambling) get loaded.
- Forgetting PCI compliance fees. Some acquirers charge £6 to £15 monthly PCI fees; some bake them into the headline.
Frequently asked questions
What is Total Cost of Acquiring (TCA)?
TCA is the all-in cost of accepting card payments across a year, expressed either as a percentage of card volume or in pounds. It blends the merchant service charge (MSC), monthly fee, per-transaction flat fee, chargeback fee, scheme fees, refund handling and any pass-through costs. Headline rates ignore most of these line items.
Why does a 1.4% headline rate cost more than a 1.69% no-contract rate sometimes?
Because the 1.4% deal usually carries a £15-£25 monthly fee, a 12-month contract and per-transaction flat fees. Below ~£4k monthly volume, the no-contract 1.69% beats the bundled 1.4% on TCA. Above ~£8k monthly, the bundled rate wins. The crossover is the input that matters, not the rate.
Should I include chargeback fees in TCA?
Yes if you have any chargeback exposure. UK acquirers charge £15 to £35 per chargeback regardless of outcome (you eat the fee even if you win the dispute). High-ticket retail, e-commerce and B2B-with-disputes need to model 0.5% to 1.5% chargeback rate; trades with no historical disputes can leave it at zero.
What are scheme fees and why are they often hidden?
Scheme fees are the cuts that Visa, Mastercard, AMEX and the network operators take. Blended-rate acquirers bury them in the headline rate; interchange-plus acquirers pass them through line by line on the statement. Visa and Mastercard scheme fees combined run roughly 0.05% to 0.20% on UK domestic card volume in 2026.
How do refunds factor into TCA?
Refunds reverse the original transaction but most acquirers do not refund the merchant fee on the original sale. Some still charge a per-refund flat fee on top. For trades with high refund rates (e-commerce returns at 15-30%, hospitality refunds at 1-3%), the refund leakage adds 5-15 basis points to TCA.
Does the calculator handle commercial card vs consumer card mix?
Yes for the interchange-plus model. UK consumer-card interchange is regulated at 0.2% debit and 0.3% credit; commercial-card interchange is unregulated and runs 1.0% to 2.5%. If your B2B mix is meaningful, blended pricing usually loses to interchange-plus. If your mix is consumer-only retail, blended is usually cheaper to administer.
What about cross-border transactions?
UK-EEA cross-border interchange is currently the subject of legal challenge. The Payment Systems Regulator capped Visa and Mastercard cross-border fees at 0.2% (debit) and 0.3% (credit) in January 2026; Visa and Mastercard appealed. The Court of Appeal heard the case on 17 March 2026. Until resolved, factor in the previous 1.15% to 1.50% cross-border interchange where applicable. See our cross-border interchange guide.
When is the £25k annual / £4k monthly volume threshold relevant?
Below £25k annual (~£2k monthly) card volume, almost any no-contract acquirer is cost-competitive within 5-10 basis points. Between £4k and £8k monthly, blended pricing starts to outperform if you can negotiate. Above £25k monthly, interchange-plus pricing materially beats blended every time. The thresholds are the practical cut-points for moving to a different pricing model.
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Oliver leads AcceptCard's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 10 May 2026