UK fintech Revolut as well as payment services groups Mastercard and Visa have lost a legal challenge against the UK payments regulator over its plans to introduce a cap on cross-border card fees.
The three companies brought the case before the High Court in London after the Payments Systems Regulator (PSR) said in December 2024 that it intended to consult on whether to impose a cap on fees charged when European consumers make online purchases from UK-based businesses.
The PSR had previously raised concerns that Mastercard and Visa increased cross-border interchange fees to what it described as an “unduly high level.” Interchange fees are charges paid between banks for processing card transactions.
Mastercard, Visa and Revolut argued that the regulator did not have the legal authority to impose price caps, particularly as the proposed level and timing of any cap have not yet been determined.
However, Judge John Cavanagh rejected the challenge and ruled that the PSR does have the power to introduce price caps on interchange fees.
Following the ruling, the PSR issued a statement welcomed the decision, noting that it enables the regulator to continue with its analysis of what the appropriate level these fees should be.
PSR Managing Director David Geale said: “We welcome the High Court’s decision, which confirms our powers to ensure card payment costs are fair for UK businesses and consumers.
“This enables us to drive forward the work we have been doing to ensure cross-border interchange fees are set at an appropriate level.”
Visa previously disputed the PSR’s findings and warned that price caps could hurt businesses and consumers.
The case comes despite the UK government said in March that it plans to abolish the PSR as part of efforts to reduce regulatory burdens and promote economic growth, with the Financial Conduct Authority (FCA) due to take over some of its responsibilities.
