Today, as part of its market review on cross-border interchange fees, the PSR has published a paper outlining what it sees as the potential impacts of these fees on UK businesses and consumers.

Since the UK left the European Union, Visa and Mastercard have increased interchange fees on some UK-European Economic Area (EEA) payments five-fold. This impacts UK businesses which accept online or mobile payments made using an EEA-issued credit or debit card.

As a result of these increases, UK businesses, especially smaller ones, face higher costs, that they may pass onto consumers.

In this latest update, the PSR sets out its initial thinking about the impact of these increases and considers how UK service users (such as merchants accepting card payments and their customers) may potentially have been harmed. The PSR also explores how merchants or acquirers might mitigate the impact of the increases, for example through relocation of cross-border transactions.

As part of its market review, the PSR wants to build a detailed understanding of these issues so it can understand if the market is working well, and – if not – what action it may need to take.

Chris Hemsley, the PSR’s Managing Director, said:

“We want to make sure that everyone pays fair prices for the payment services they use and that many depend upon.

“This is an important part of our wider review of how well the cards market is working. This stage of our work will give us a better understanding of the impact these increases are having.

Once the PSR has completed its assessment of the market, including receiving views on this working paper, it will publish its interim report in 2023.


  • The PSR is collecting feedback on this working paper until 19 January 2023. The specific areas the regulator is interested in hearing views on are outlined in the working paper [link].
  • The increases in consumer cross-border interchange fees are for certain card transactions between the UK and the EEA, where the cardholder is not present (such as payments made by phone or online). Since the UK left the EU, previous IFR caps on these fees no longer apply. Visa and Mastercard have increased the interchange fees on online purchases made by UK consumers to European businesses and vice versa fivefold, from 0.2% to 1.15% for debit cards, and 0.3% to 1.5% for credit cards.
  • In October, the PSR published final terms of reference for its two market reviews into card fees – one on scheme and processing fees, and one on cross-border interchange fees. These also include ambitious timetables setting out the next stages of the PSR’s work on these areas.