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Visa and Mastercard under fire for skyrocketing post-Brexit card fees

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Visa and Mastercard under fire for skyrocketing post-Brexit card fees By Proactive Investors

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Published Dec 13, 2023 13:07
Updated Dec 13, 2023 13:40

© Reuters. Visa and Mastercard under fire for skyrocketing post-Brexit card fees

Proactive Investors – The Payment Systems Regulator (PSR) has zeroed in on escalating cross-border interchange fees levied by major card operators Mastercard (NYSE:MA) and Visa (NYSE:V), proposing a cap on these fees to protect UK businesses from unfair charges.

Following an in-depth review, the PSR suggested an initial cap of 0.2% for consumer debit and 0.3% for credit transactions between the UK and European Economic Area (EEA), with a future permanent cap after further analysis.

An interchange fee is a fee that acquirers pay to issuers each time a card is used to buy goods or services.

This is a per-transaction fee and is usually levied as a percentage of the transaction value.

According to the review, cross-border transaction fees between the UK and EEA paid by merchants have increased nearly sixfold since Britain’s EU departure.

Bringing fees back to 0.2% and 0.3% would bring them back to pre-Brexit levels.

Chris Hemsley, managing director at PSR, stated: “In this market review we have provisionally found that the fees charged by Mastercard and Visa to UK businesses which accept payments from within the EEA are likely too high.

“In short, at this stage we do not think this market is working well. Should we ultimately conclude this is the case, our interim report sets out a range of potential solutions which could be implemented.”

The PSR is now seeking feedback from relevant parties until 31 January 2024.

Read more on Proactive Investors UK

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Visa and Mastercard under fire for skyrocketing post-Brexit card fees

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