Flat-Rate vs Custom Pricing: Is SumUp or Square Right for You?
When you start taking card payments, you face a choice that quietly shapes your costs for years: a simple flat rate from a provider like SumUp or Square, or a custom rate through a merchant account. One is wonderfully simple, the other can be much cheaper at the right volume. This guide explains the difference, what each actually costs, and how to work out which one saves your business money.
Flat-rate vs custom pricing: what is the difference?
Flat-rate pricing charges one fixed percentage on every card, whatever the type. Custom pricing charges different rates for debit and credit through a merchant account, which can work out cheaper as your volume grows.
Flat-rate providers like SumUp, Square and Zettle keep things simple: one percentage, no monthly fee, instant sign-up. Custom or tiered pricing, offered through a traditional merchant account, separates debit from credit, and since debit makes up most UK card payments and costs far less to process, that split is where the savings come from at higher volumes.
What do SumUp, Square and Zettle charge?
All three use simple flat rates with no monthly fee, and cheap hardware. The differences between them are small.
| Provider | In-person rate | Online rate | Monthly fee |
|---|---|---|---|
| SumUp | 1.69% | 2.5% | None (reader from about 25 pounds) |
| Square | 1.75% | 1.4% plus 25p | None (reader from about 19 pounds) |
| Zettle (PayPal) | 1.75% | 2.5% | None (reader from about 25 pounds) |
Rates are correct as of early 2026 and can change, so check the provider's current pricing. SumUp also offers a subscription plan that drops its rate to around 0.99% for a monthly fee, which starts to pay off above roughly 2,700 to 3,300 pounds of card turnover a month.
When flat-rate pricing is the cheaper choice
Flat-rate wins when your card volume is low: new businesses, sole traders, market traders, seasonal or pop-up operations.
If you process a few thousand pounds a month or less, the simplicity is worth a lot and the per-transaction cost barely matters. There is no monthly fee to absorb, no contract, and you only pay when you take a payment. For a business still finding its feet, that predictability is genuinely valuable, and switching to a custom rate too early can cost more than it saves.
When custom pricing saves you money
Custom pricing through a merchant account usually wins as volume grows, especially if most of your payments are on debit cards.
Here is the key point most people miss. A flat rate charges the same on a debit card as a credit card, but debit is much cheaper to process. Under a custom rate, debit is priced separately and far lower, with benchmarks starting from around 0.35% for debit and 0.65% for consumer credit. So a debit-heavy business processing a decent volume can pay well under a 1.69% or 1.75% flat rate once the numbers are done properly. Our guide to what a merchant account is explains how this setup works.
How to work out which is cheaper for you
Compare the flat rate against your likely effective rate on custom pricing, using your real volume and your debit-to-credit split.
As a rough example, a business taking 15,000 pounds a month that is mostly debit could pay around 260 pounds on a 1.75% flat rate. On a custom rate weighted toward that debit volume, the same business might pay noticeably less, even after a small monthly fee and PCI of around 6 pounds. The honest answer depends on two things: your monthly volume and your card mix. Below a few thousand pounds a month, flat-rate is usually fine. Above it, custom pricing is often worth a serious look. Our breakdown of card machine fees shows how the maths plays out.
So which should you choose?
There is no single winner. The right model depends on your volume and what you sell, which is exactly why it is worth checking your own numbers rather than guessing.
Flat-rate providers are excellent for getting started and for low volumes. Custom pricing tends to win as you scale, particularly on debit. The mistake is staying on a flat rate out of habit long after your volume has outgrown it, quietly overpaying every month. Our guide to the best card machine for small businesses covers the wider choice of hardware and providers.
Flat-rate vs custom pricing: FAQs
Is SumUp or Square cheaper?
They are very close. SumUp charges around 1.69% in person and Square around 1.75%, both with no monthly fee. Square is often cheaper for online payments. For most small businesses the difference is small.
What is the difference between flat-rate and custom card pricing?
Flat-rate charges one fixed percentage on every card. Custom pricing charges debit and credit separately through a merchant account, which can be cheaper as your volume grows because debit costs less to process.
Is flat-rate pricing good for a small business?
Yes, for low volumes. It is simple, has no monthly fee, and you only pay when you take a payment, which suits new businesses, sole traders and seasonal operations. At higher volumes, custom pricing often costs less.
At what point should I switch from flat-rate to a merchant account?
It depends on your volume and card mix, but once you are processing several thousand pounds a month, especially mostly on debit, it is worth comparing a custom rate, as the savings often outweigh any monthly fee.
Why is a flat rate sometimes more expensive?
Because it charges the same on debit and credit, even though debit is much cheaper to process. A custom rate prices debit separately and far lower, which a flat rate cannot do.
How do I know which is cheaper for my business?
Work out your effective rate on your real volume and card mix, then compare it against the flat rate. The right answer depends entirely on how much you process and your debit-to-credit split.
Not sure whether flat-rate or custom pricing is cheaper for you? Send us your numbers and we will tell you which model saves you money. Free, no obligation.
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