UK High Court Upholds Regulator’s Power to Cap Cross-Border Card Fees in Defeat for Mastercard, Visa and Revolut
London’s High Court rejects legal challenge by global payment firms and fintech, affirming the Payments Systems Regulator’s authority to curb rising online transaction costs
The United Kingdom’s High Court ruled on January 15 that Mastercard, Visa and the British fintech Revolut have no legal basis to block a proposed cap on interchange fees for cross-border online card payments, a decision that strengthens regulatory oversight of payment costs for UK businesses and consumers.
Judge John Cavanagh dismissed the judicial review brought by the three firms against the Payment Systems Regulator’s plans, concluding that the watchdog is properly empowered to pursue limits on fees that banks pay when processing international card transactions, including those made between British merchants and European buyers.
The regulator’s initiative, first consulted upon in late 2024 after finding that interchange fees had increased sharply post-Brexit, aims to rein in costs that it said have climbed several-fold for “card not present” purchases such as online sales and have imposed an estimated additional burden on UK retailers.
The level and exact timing of any fee caps have yet to be finalised, and the regulator will now press ahead with its consultation outcomes.
The challenge by Mastercard, Visa and Revolut focused on whether the regulator had overstepped its statutory remit in proposing such price controls, but the court determined that its mandate to protect competition and ensure fair payment systems encompasses the authority to impose such measures.
The companies had argued that capping interchange fees could undermine certain business models and reduce the value derived from card payments, especially against a backdrop of rising costs in payment infrastructure and the proliferation of digital wallets.
In response to the judgment, the Payment Systems Regulator’s leadership welcomed the confirmation of its powers, emphasising the importance of curbing high costs for UK firms engaging in cross-border commerce.
Mastercard, Visa and Revolut did not immediately offer statements on the ruling.
The decision comes as the UK government is preparing to merge the regulator into the Financial Conduct Authority in a broader overhaul of financial oversight, even as debates continue over the balance between consumer protection and fostering competition and innovation in the payments sector.
Judge John Cavanagh dismissed the judicial review brought by the three firms against the Payment Systems Regulator’s plans, concluding that the watchdog is properly empowered to pursue limits on fees that banks pay when processing international card transactions, including those made between British merchants and European buyers.
The regulator’s initiative, first consulted upon in late 2024 after finding that interchange fees had increased sharply post-Brexit, aims to rein in costs that it said have climbed several-fold for “card not present” purchases such as online sales and have imposed an estimated additional burden on UK retailers.
The level and exact timing of any fee caps have yet to be finalised, and the regulator will now press ahead with its consultation outcomes.
The challenge by Mastercard, Visa and Revolut focused on whether the regulator had overstepped its statutory remit in proposing such price controls, but the court determined that its mandate to protect competition and ensure fair payment systems encompasses the authority to impose such measures.
The companies had argued that capping interchange fees could undermine certain business models and reduce the value derived from card payments, especially against a backdrop of rising costs in payment infrastructure and the proliferation of digital wallets.
In response to the judgment, the Payment Systems Regulator’s leadership welcomed the confirmation of its powers, emphasising the importance of curbing high costs for UK firms engaging in cross-border commerce.
Mastercard, Visa and Revolut did not immediately offer statements on the ruling.
The decision comes as the UK government is preparing to merge the regulator into the Financial Conduct Authority in a broader overhaul of financial oversight, even as debates continue over the balance between consumer protection and fostering competition and innovation in the payments sector.
