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Revolut, Visa and Mastercard have lost a legal battle in the UK over a proposed regulatory cap on fees from international transactions.
The High Court in London ruled on Thursday that the UK’s Payment Systems Regulator would be within its rights to impose a price cap on cross-border interchange fees. These are levied by Visa and Mastercard on banks and have increased markedly since Brexit.
The ruling came despite intense lobbying from fintechs and banks across Europe. Visa and Revolut filed a judicial review against the regulator in 2025, arguing that the PSR had overstepped its powers and was damaging competition.
The judgment also comes days after President Donald Trump’s call to limit credit card interest rates to 10 per cent sparked ire from the banking and payments sector.
Visa, Revolut and Mastercard did not immediately respond to requests seeking comment on Thursday’s judgment.
The PSR proposed in 2023 to cap interchange fees on cross-border online payments after it found such fees had risen more than fivefold since Brexit.
The level of the price caps, and the date of implementation, are yet to be decided by the PSR. The government has decided to abolish the regulator and roll it into the Financial Conduct Authority.
Cross-border interchange fees are levied when a customer from one country purchases something from a merchant in another country. The dispute centred around these “card not present” transactions, such as online purchases.
Between 2021 and 2022, Mastercard and Visa increased cross-border interchange fees for online transactions between the UK and the European Economic Area. Fees for consumer debit cards went from 0.2 per cent to 1.15 per cent, according to the PSR, while consumer credit card fees increased from 0.3 per cent to 1.5 per cent.
Mastercard and Visa do not collect interchange fees and instead act as intermediaries in transactions, though they do collect other fees. However, both companies are indirectly affected by price caps as these fees provide an incentive for banks to use their services, the judgment read.
The PSR previously estimated that these increases have cost UK businesses an additional £150mn to £200mn a year, according to a briefing paper seen by the FT.
The cap was designed “to protect UK businesses from overpaying” following complaints about the high fees charged to retailers by Visa and Mastercard, the PSR said in 2023.
However, the proposal led to a backlash from the European banks and fintechs that make money from fees. Fintechs do not lend at scale like traditional banks and so are disproportionately reliant on payment fees.
A European banking trade body told the Treasury earlier this year that the cap would make them “lose money on each transaction” as their cost of operating would be higher than the maximum fees allowed under the cap, the FT previously reported.
European banks and fintechs argue that processing payments has become more expensive since the UK left the EU, particularly with the rise of digital wallets such as Apple Pay and Google Pay adding to their costs to build out infrastructure. Fintechs also argued that the PSR’s decision to cap charges on interchange fees was counter to the government’s initiative to promote growth and was anti-competitive.
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