UK Regulator Proposes Cap on Visa and Mastercard Cross-Border Fees
The UK's payments regulator, the Payment Systems Regulator (PSR), has provisionally proposed a cap on cross-border interchange fees charged by Mastercard and Visa on transactions between the UK and the European single market. The PSR's market review found that both companies had likely raised fees to an "unduly high level," costing UK businesses an extra £150-200 million ($190-250 million) last year. Under the proposed cap, the PSR would impose initial limits of 0.2% on debit transactions and 0.3% on credit transactions, with a lasting cap to be imposed after further analysis. Visa and Mastercard have disputed the findings, with Visa stating that the proposed remedies are "not justified." The PSR is inviting feedback on the proposals until the end of January, with a final report expected in the first quarter of 2024.