How invoice payment fees work: card, ACH, bank transfer and direct debit

When a client pays an invoice through the link in an accounting app, the business receives slightly less than the invoice total. The difference is the processing fee, and it depends mostly on how the client pays. This guide compares card, ACH, bank transfer and direct debit in the US and UK, works through a typical month, and covers the rules on surcharges and late payment.

The payment methods at a glance

Card payments: a percentage, sometimes plus a fixed fee

Card payments are the most expensive way to be paid. US accounting apps that publish rates charge close to 3%:

Sources: QuickBooks payment rates, Wave payments, FreshBooks pricing and Xero US pricing, read 28 October 2026.

A worked example

On an $800 invoice paid by card:

• QuickBooks: 2.99% of $800 = $23.92
• FreshBooks: 2.9% of $800 + $0.30 = $23.50
• Wave: 2.9% of $800 + $0.60 = $23.80, or $27.20 if paid by American Express

On a $100 invoice the fixed part matters more: FreshBooks takes $3.20 and Wave $3.50, effective rates of 3.2% and 3.5%. Businesses that send many small invoices feel fixed fees most.

Bank payments in the US: ACH

ACH is the US system for batch bank-to-bank payments, and it is what an accounting app uses when a client pays an invoice from a bank account. At the apps that publish a rate it costs about 1%, and Xero lists standard ACH as free. On the same $800 invoice, 1% is $8, a third of the card fee.

ACH payments take longer to arrive than card payouts and need the client's bank details or a bank login, which is why some clients default to card. Making the bank option prominent on the invoice is the main way to shift that mix.

Bank transfers in the UK: Faster Payments

In the UK, a client paying by bank transfer usually uses Faster Payments. Pay.UK says the system is "available day and night, 365 days per year" and handles payments of up to £1 million, although each bank sets its own limits (Pay.UK). For most business accounts, receiving a transfer costs nothing.

The cost of a bank transfer is not a fee but control: the client decides when to pay and what reference to use. Clear bank details and an invoice number on the invoice reduce payments that are late or hard to match.

Direct debit

With direct debit, the business collects the payment from the client's account on an agreed date, after the client has signed a mandate. It suits retainers, subscriptions and regular invoices. FreshBooks caps its UK direct debit fee at £4 per payment (£2 on Premium).

Clients are protected by the Direct Debit Guarantee: if an error is made in the payment, the payer "is entitled to a full and immediate refund of the amount paid" from their bank (Direct Debit). That protection makes clients more willing to sign up, and it is also why a business needs accurate collection dates and amounts.

UK accounting apps rarely publish card rates on their pricing pages; our UK accounting comparison notes where they are missing.

What a typical month costs

A US business sends 20 invoices a month at $800 each, through QuickBooks. If 8 clients pay by card and 12 by ACH:

If every client paid by ACH, the month would cost $160. The card share is the main lever: each invoice moved from card to bank saves about $16 here. The same eight card payments at FreshBooks would cost $188.00, and at Wave $190.40, so on this mix the card rate matters more than the choice of app.

Can the fee be passed on?

UK. Regulation 6A of the Consumer Rights (Payment Surcharges) Regulations 2012 bars a business from charging a fee for payment by the card types it lists. Businesses can still set prices with fees in mind, or offer a discount for another method.

US. Surcharging credit cards is allowed in many states within card-network rules, and some states restrict it. Visa, for example, says merchants "must notify their acquirer 30 days before they begin surcharging" (Visa). Card networks treat debit and credit differently, so the rules for each are worth checking before adding a surcharge. A common alternative is a discount for paying by bank.

Getting paid on time

UK. The late payment rules for business-to-business invoices set out what happens when payment is late (gov.uk):

• If no payment date was agreed, payment is late 30 days after the invoice. Agreed terms must usually be within 60 days for business transactions.
• The business can claim statutory interest of "8% plus the Bank of England base rate", unless the contract sets a different rate (gov.uk).
• It can also claim fixed compensation: £40 for debts under £1,000, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more (gov.uk).

Example. A £5,000 invoice paid 45 days late, with Bank Rate at 3.75%, carries statutory interest of 11.75% a year for 45 days, about £72.43, plus £70 fixed compensation.

US. There is no single federal late payment law for business invoices. Late fees and interest come from the contract and state law, so they need to be in the agreed terms before work starts.

How to compare apps on fees

1. Estimate how many invoices you send a month and their average value.
2. Estimate the share your clients pay by card.
3. Add the subscription to the monthly payment fees at each app's published rates.
4. For UK businesses, add direct debit fees for any recurring invoices.

The accounting cost calculator does this in dollars or pounds, and the US comparison ranks five apps for a reference business.