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Visa, Mastercard and Revolut Fail to Block UK Fee Cap Proposal

By  |  January 15, 2026

A UK court has ruled that regulators are acting within their legal authority to limit fees on international card transactions, dealing a setback to major payments firms and fintech companies challenging the move.

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    On Thursday, the High Court in London decided that the UK’s Payment Systems Regulator (PSR) would be entitled to impose a cap on cross-border interchange fees, according to The Financial Times. These fees are charged on transactions where a customer and merchant are based in different countries and are applied primarily to online purchases.

    The case was brought by Visa and fintech group Revolut, with support from Mastercard, following the regulator’s 2023 proposal to rein in sharply higher charges that emerged after the UK’s exit from the European Union. Per The Financial Times, the companies argued that the PSR had exceeded its mandate and that the proposed cap would undermine competition across the payments sector.

    The court’s judgment comes amid broader political scrutiny of the payments industry. According to The Financial Times, it follows closely after US President Donald Trump called for credit card interest rates to be limited to 10 per cent, a suggestion that drew strong criticism from banks and card networks.

    Visa, Mastercard and Revolut did not immediately comment on the ruling, per The Financial Times.

    The PSR’s intervention focuses on so-called “card not present” transactions, such as online shopping, where interchange fees rose steeply after Brexit. Between 2021 and 2022, Visa and Mastercard raised fees on online transactions between the UK and the European Economic Area. Debit card fees increased from 0.2 per cent to 1.15 per cent, while credit card fees climbed from 0.3 per cent to 1.5 per cent, according to figures cited by the regulator and reported by The Financial Times.

    Read more: Retailers Urge Judge to Block Visa, Mastercard Fee Settlement

    While Visa and Mastercard do not directly collect interchange fees, acting instead as intermediaries, the court noted that they are indirectly affected. These fees encourage banks to issue and use cards on their networks, meaning any cap could alter incentives across the system, per The Financial Times.

    The PSR has estimated that higher interchange fees have added between £150mn and £200mn a year to UK business costs, according to a briefing paper seen by The Financial Times. The regulator said the proposed cap was intended “to protect UK businesses from overpaying” after retailers complained about rising charges.

    However, the plan has drawn strong opposition from European banks and fintech companies, which rely more heavily on transaction fees than traditional lenders. According to The Financial Times, a European banking trade body warned the UK Treasury earlier this year that the cap could force firms to “lose money on each transaction” because their operating costs would exceed the capped fee levels.

    Banks and FinTechs have also argued that the cost of processing payments has increased since Brexit, pointing to additional compliance requirements and the growing use of digital wallets such as Apple Pay and Google Pay, per The Financial Times. They maintain that the regulator’s approach runs counter to the government’s stated goal of encouraging economic growth and competition.

    The final level of the fee cap and the timeline for its introduction have yet to be set. The ruling also comes as the UK government prepares to abolish the Payment Systems Regulator and merge its functions into the Financial Conduct Authority, according to The Financial Times.

    Source: The Financial Times