UK Proposes Capping Some Visa, Mastercard Fees

Regulators in the UK are weighing a cap on some of the fees that Visa and Mastercard charge local merchants for each card transaction, seeking to rein in charges that have risen fivefold since Brexit. From a report: After a monthslong review, the UK's Payment Systems Regulator said it's concerned that the payment giants have no effective competition, especially when it comes to the interchange fees they charge UK merchants when a consumer carrying a card issued by a bank in the European Economic Area makes an online purchase. For now, the PSR is proposing to restore those fees to the pre-Brexit levels of 0.3% of a purchase price for credit cards and 0.2% for debit cards. For credit cards, those fees have risen in recent years to as high as 1.5% and the PSR estimated that the increases cost UK businesses as much as $250 million last year. The two companies have been under fire from a bevy of regulators and lawmakers around the world for the fees they charge. While it usually amounts to just pennies per purchase, the fees do add up: US merchants spent a record $160.7 billion on swipe fees last year, up 16.7% from 2021, according to the Nilson Report, an industry publication.

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