On top of that, if students use credit cards, there is a charge per swipe. So that raises costs for students.
Not in the UK there isn't - the merchant fee is a percentage of the takings, usually around 2% (unless it's American Express where it's about 4-5%). So it doesn't matter whether you pay after every flight, pay up front or in arrears, the card fees will be the same.
There are transaction charges in the UK - it depends on your setup with your bank. I have a PDQ machine here and there's a transaction charge for each payment you take. It's a flat 20p for Maestro/Switch, but a percentage for credit cards.
The percentage is based on volume - the lower the volume, the higher the percentage - but it averages between 1.3 and 3% ish per swipe, sometimes with a mandatory 10p (so X pence + 2% etc isn't uncommon).
You can bypass the transaction fees and have a lower fee applied across the board, but that usually means bureauing to the bank, and you may have to wait 2-4 weeks for the money to come back, which may case cashflow issues in a tightly financed business.