UK Court Grants Regulator Authority to Cap Cross-Border Card Fees

London | EcoPulse24

Mastercard, Visa, and fintech company Revolut have lost a legal challenge in London against the UK's Payment Systems Regulator, paving the way for a potential cap on cross-border card fees. The court found that the regulator has the legal authority to intervene in pricing, especially when fees are deemed 'unreasonably high' and detrimental to British businesses. The case centered on the regulator's plan to consult on reinstating caps on interchange fees, which increased after the UK left the European Union. The regulator is considering setting an initial cap of 0.3% for credit card transactions and 0.2% for debit cards, restoring parity between customers in the European Economic Area and the UK, as was the case before Brexit. The timing and final level of the cap have yet to be determined. The decision is part of wider scrutiny of credit card company practices globally, amid mounting political and regulatory pressure on payment fees. The regulator previously estimated that British businesses faced up to £200 million in additional costs due to post-Brexit fee hikes. The ruling shifts the balance of power between payment networks and regulators in the post-Brexit era, signaling a return to direct regulatory intervention to protect merchants from inflated costs. If implemented, the cap could pressure European banks and card network revenues, but may boost UK merchant competitiveness and recalibrate digital payment costs. The development reflects a global trend toward tighter oversight of payment fee structures, with potential implications for business models and sector profit margins.