The Fee You Cannot Pass On
In the years since the pandemic, UK hospitality has become largely cashless. A substantial majority of transactions in restaurants and bars now go through a card or phone. The bill arrives. The round gets tapped. The booking was paid online before the diner walked in. The cash that once moved through the till has largely stopped.
Every one of those transactions carries a cost.
What the fee actually is
Card processing charges run through a layered structure. Interchange fees go to the card-issuing bank. Scheme fees go to Visa or Mastercard for running the network. The acquiring bank adds its own margin. The blended rate a hospitality business pays per transaction typically sits somewhere between one and two percent, depending on the contract and card type.
On a kitchen processing several thousand pounds of transactions a week, that percentage is not incidental. It runs on every cover, every round, every food bill. It scales with revenue. On a strong week it is a real cost. On a quiet week it is the same real cost, because it is tied to turnover rather than profit.
The charge that went nowhere
The Consumer Rights (Payment Surcharges) Regulations 2017 banned UK businesses from adding a surcharge to personal debit and credit card payments from January 2018. The rationale was consumer protection. The practical effect in hospitality was that every subsequent increase in card processing costs has been absorbed by the operator, not recovered from the diner.
The Payment Systems Regulator found that Visa and Mastercard raised their core scheme fees by more than 25 percent in real terms between 2017 and 2023. Those increases landed during the same period as rising employer National Insurance contributions, the wage floor adjustments, the rates revaluation, and the energy cost spike. The card schemes raised their fees into an environment where the businesses paying them had no legal mechanism to pass the cost on. The increases landed, quietly, in the margin.
What the tribunal found
In June 2025, the Competition Appeal Tribunal ruled that certain interchange fees set by Visa and Mastercard had breached competition law. Trial 2, determined in February 2026, found that acquiring banks had passed those fees on to merchants at between 85 and 100 percent, and that merchants had not in turn passed them on to consumers. Hospitality firms had absorbed the full cost of fees the tribunal found unlawful.
Claims are now being coordinated through competition litigation firms. But in March 2026, the Court of Appeal granted Visa and Mastercard permission to appeal the infringement findings. Any damages will wait for further proceedings. Nothing arrives soon.
The cover and the fee
The card processing cost continues while the legal process runs. A court finding of unlawfulness does not suspend the fee during appeals. The kitchen pays the current rate until it does not, and that may be years from now.
What card processing shares with business rates, energy standing charges, and loan repayments is that it runs regardless of what the room earns. A full service and a thin one both pay the fee on what they process. The empty seat avoids it entirely. No transaction, no fee.
But the empty seat avoids it by earning nothing. The kitchen prepped. The team clocked on. Every fixed cost in the building ran without a cover against it. The processing fee is the one cost that simply does not appear when the chair stays cold.
That is not an advantage. It is a measure of what zero revenue actually looks like.
Around 4pm, when the shape of the evening is clear, venues release on Halfseat the tables they expect to lose. Food at half price. Drinks at full price. A real cut of the booking fee going directly to the venue. The cover that fills that seat generates a transaction. The processing fee runs on it. So do the drinks margin, the wage contribution, the cover against every standing charge. The revenue that arrives is not zero.
The fee runs on every cover that earns something. The empty seat avoids it by earning nothing at all.