What is an authorisation fee on a card machine?
An authorisation fee is a small fixed charge, usually a few pence, applied every time your card machine contacts the card network to approve a transaction. It sits on top of your percentage rate, and because it is charged per transaction rather than per pound, it hits businesses with lots of small sales hardest.
The fee covers the authorisation message itself, which is why it can apply even when a transaction is declined or later refunded. Not every provider charges one separately; some roll it into the headline rate, which is one reason two quotes with different shapes are hard to compare on the rate alone.
How much does an authorisation fee add to my costs?
The arithmetic is simple and worth doing on your own numbers. Take a coffee shop processing 3,000 card transactions a month at an average of £4 each. A 2p authorisation fee adds £60 a month — which on £12,000 of card turnover is an extra 0.5% on top of the quoted percentage rate. The same 2p fee on a furniture shop doing 100 transactions at £400 each adds £2 a month, effectively nothing.
That is the whole story of authorisation fees: identical fee, completely different impact, decided by your average transaction value. Low-ticket, high-volume businesses — cafes, bakeries, convenience stores, pubs — should always ask about per-transaction charges before comparing percentage rates.
How do I find out what I am being charged?
Look at one monthly statement for a line described as authorisation fees, auth fees, or a per-item charge, and check your contract or fee schedule for a pence-per-transaction figure alongside the percentage. If the statement is unclear, ask the provider directly in writing to confirm every per-transaction charge on the account. Then divide your total monthly charges by your card turnover — the effective rate — which captures authorisation fees and everything else in one comparable number.
Frequently asked questions
Is an authorisation fee charged on declined transactions?
Often, yes — the fee pays for the authorisation attempt, not the sale, so a declined or later-refunded transaction can still incur it. Providers differ on this, so check your own fee schedule or ask the provider to confirm in writing.
Do all card machine providers charge authorisation fees?
No. Some charge a separate pence-per-transaction fee, others build the cost into their headline percentage rate. Neither model is automatically cheaper — a flat rate with no auth fee can suit high-volume small transactions, while separate pricing can suit larger average sales. Compare on your own statement using the effective rate.
Can I negotiate authorisation fees?
Sometimes, particularly if your transaction volumes have grown since you signed. Providers review pricing to keep accounts, and a competitor quote for the same card mix is the strongest thing to have in hand when you ask.
Not sure what your statement is charging you?
Send one month through the fee check. We work out your effective rate, authorisation fees included.
CapExpand Ltd (Company No. 14433858) is an authorised Dojo partner, not a card machine manufacturer. We are not currently authorised or regulated by the Financial Conduct Authority. Card machine pricing and availability are subject to change. All information on this page is for general guidance only.