We take a closer look at how the latest changes to credit and debit card charges are affecting car garages in the UK.


The process of simply getting paid and ensuring you are able to do so in the most beneficial and flexible way possible is not always easy. The charging structures some providers use can often seem deliberately over complicated and difficult to understand. To add to this complexity, new legislation introduced over the last few years that has resulted in big changes to the way payments are charged.


Changes to charging structures and how they affect you

Debit Cards

One of the key changes has been in the way debit cards are charged, previously they were priced at a ‘pence per transaction’ rate, today they are charged at a % of the transaction volume.

The easiest way to demonstrate how this affects you is to look at a working example, the average transaction value for a garage is around £200, so we’ll use that figure for our calculations.

Before the changes took effect, if your customer paid you £200 using a debit card you would be charged a flat rate of approximately 20p. Today you will be charged a % of the £200. If we use 0.4% which is a popular rate we see from other providers, this would result in a charge of 80p – An increase of 60p for every transaction!

According to our research, the average garage accepts approximately 1000 card transactions a year, 75% of which are made using a debit card. This results in an increase of £450 per year for the average garage, possibly more if your turnover is higher than average or you’re paying a higher processing charge.


Credit Cards

There has also been a change in the way consumer credit cards are charged. This is more straightforward as the format of the charge hasn’t changed, it remains as a % of the transaction value. However, there has been a reduction of 0.5% on the fees that the providers are charged for processing consumer credit cards. This reduction should have been passed on to you, but we have seen a significant number of cases where it has not. When did you last check what rates you are being charged? Card expenditure in the UK continues to rise, a trend which is also evident in garages who have seen a consistent increase in the use of cards over the last 5 years.

As technology and payment methodologies continue to evolve, more and more consumers expect to pay by card. It is therefore more important than ever to keep up to date with the changes and make sure you are able to accept cards without losing valuable profit margin in the process.

*Source: UK Card Payments Association – Figures include all businesses within the auto servicing, parts & repair sector classification and excludes vehicle sales and rentals.


How to make sure you are getting the best deal for you

Other than only accepting cash, which is not an option in today’s modern world and will undoubtedly deter your customers, the only option you have is to review your rates and make sure you’re using the right solution for your business.

As independent payment experts, our consultants are on hand to offer you a free ‘payments MOT’, we’ll ensure you’re using the most suitable, secure and cost-effective solution available for your individual business. In addition to reducing your costs, we will also provide free on-going support and assistance with anything payments related. We’ll keep you up to date on industry news or changes that could affect your business and will always be on hand to offer free, honest, independent advice.


Let the experts take care of your payments, so you can focus on running your business!