Mastercard, Visa Lose UK Legal Fight Over Card Fees

High Court Upholds Regulator's Authority on Fee Caps

London’s High Court has rejected a legal challenge brought by Mastercard, Visa, and Revolut against the UK's Payment Systems Regulator. The ruling confirms the PSR's authority to proceed with its proposal to cap cross-border interchange fees, although the specific levels and implementation timeline have not yet been determined.

Overview of the Regulatory Dispute

The case centered on the PSR's plan, announced for consultation in December 2024, to limit fees charged when European consumers make online purchases from UK businesses. The regulator previously stated concerns that both Mastercard and Visa had increased these fees to an "unduly high level" following Brexit. The court's decision affirms the PSR's jurisdiction in this matter.

Potential Impact on Payments and Commerce

The proposed fee caps could lower costs for UK merchants that sell goods and services to customers within the European Union. Conversely, the card networks argue such limits could negatively affect the value and innovation they provide. Visa had previously disputed the PSR’s findings, suggesting price controls can harm the benefits that consumers and businesses receive from card payments.

Summary and Next Steps

With the legal challenge dismissed, the Payment Systems Regulator can now move forward with its consultation and decision-making process regarding the fee caps. The focus will now shift to the specifics of the proposed regulation and the industry's response as the PSR determines the final cap structure.

FAQ

Q: What was the legal challenge about?
A: Mastercard, Visa, and Revolut challenged the UK Payment Systems Regulator's authority to impose price caps on cross-border card fees.

Q: What was the court's decision?
A: The High Court ruled in favor of the Payment Systems Regulator, rejecting the challenge from the payment companies.

Q: What happens next?
A: The regulator will proceed with its plans to consult on and potentially implement the fee caps, with the level and timing still to be decided.

Source: Investing.com