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Mastercard, Visa and Revolut have just lost a High Court challenge in London against the UK payments regulator over plans to cap certain cross‑border card fees.
What the case was about
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The dispute concerned the UK Payment Systems Regulator’s (PSR) plan to restore a cap on interchange fees for online (card‑not‑present) purchases made by European consumers from UK merchants.
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These default interchange fees, set by Visa and Mastercard and paid between banks on each card transaction, rose sharply after Brexit once EU caps stopped applying to many UK‑EU transactions.
Why Mastercard, Visa and Revolut sued
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Mastercard, Visa and Revolut brought a joint judicial review arguing the PSR did not have the legal power to impose price caps through its general regulatory directions.
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They also argued the regulator should not proceed to cap fees before finally deciding the precise level and timing of any cap.
What the High Court decided
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Mr Justice John Cavanagh dismissed the challenge, ruling that section 54 of the Financial Services (Banking Reform) Act 2013 allows the PSR to impose price caps by general direction, including on these cross‑border interchange fees.
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The judgment confirms that no other statutory restriction prevents the PSR from using those powers in this way, so the cap plan can move ahead.
What this means for fees
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The decision clears the way for the PSR (now operating within or alongside the Financial Conduct Authority after a merger) to continue designing and consulting on the level and structure of the cap.
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The exact cap rates and implementation date have not yet been fixed, but the PSR has previously estimated that post‑Brexit fee hikes were costing UK merchants and consumers about £150–£200 million a year.
Impact on businesses and consumers
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For UK merchants selling online to EU customers, a cap would be aimed at reducing card processing costs on those cross‑border transactions, which regulators say have been “unduly” or “excessively” high.
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Over time, lower interchange costs could ease pressure on prices or fees faced by UK businesses and, indirectly, consumers, though how much is passed through will depend on competitive conditions in each sector.
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