PSR publishes final report confirming UK-EEA cross-border interchange fee concerns and consults on price cap remedy

The Payment Systems Regulator (PSR) published the Final Report of its market review into UK-EEA consumer cross-border interchange fees in December 2024, alongside a consultation on proposed remedies¹. The review examined fees paid by UK businesses when consumers use Mastercard or Visa debit or credit cards issued in the European Economic Area for online retail transactions¹.

The PSR said it set out provisional concerns in 2023 that Mastercard and Visa had likely raised these fees to an unduly high level, at the expense of UK businesses¹. It estimates that in 2022 alone UK businesses paid an extra £150 million to £200 million because of the fee increases, which followed significant rises by the two schemes in 2021 and 2022¹. The Final Report confirms those findings and states that a lack of competition in the market leads to costly price increases with an unclear rationale¹.

The associated consultation paper, CP24/14, sets out a proposed two stage price cap remedy intended to address the issues identified in the Final Report¹. The PSR has not set out the level of any cap in the material published alongside the Final Report; the proposed initial cap and the methodology for a lasting cap are to be developed through the consultation and later publications¹.

The PSR page carrying the Final Report was updated on 27/12/24 to correct a typographical error, with further amendments including corrected cross-references and footnote dates¹.

Why it matters for households

Cross-border interchange fees are paid by UK businesses, not by shoppers at the till, when an EEA-issued Mastercard or Visa card is used online with a UK business¹. The PSR's estimate of £150 million to £200 million in extra costs in 2022 therefore falls first on those businesses¹. Whether any reduction in fees would be passed through to consumers in the form of prices is not stated in the Final Report material¹. The review concerns EEA-issued cards used with UK businesses; it does not cover fees on UK-issued cards used abroad, and no change to consumer card terms is announced¹. Anyone with an interest in online retail payments between the UK and the EEA, including cardholders, is listed among the intended readers of the report¹. For background on how these fees work, see card interchange and scheme fees and credit card fees and charges.

What happens next

The PSR has said that if it decides a phased approach to a cap is appropriate, it will publish a final remedies notice on the proposed initial price cap next year, with a proposed methodology for developing a lasting cap at a later date¹. The consultation paper CP24/14 seeks views on the potential remedies identified in the Final Report¹. No date for a decision on the cap has been reported beyond the reference to next year¹. The PSR's role in payments and card fees is set out in its regulator guide.