A temporary cap on the cross-border interchange fees that Mastercard (MA.N) and Visa (V.N) charge for transactions between the UK and the European single market was recommended by the payments regulator for Britain on Wednesday.
Not Justified
After releasing the preliminary results of a market study on interchange fees collected since Brexit, when the European Union’s payment regulations ceased to apply in the United Kingdom, the Payment Systems Regulator (PSR) said that a cap would shield companies from overspending.
According to the PSR, as Mastercard and Visa handle 99% of debit and credit card payments in the UK, their fees were the main focus of the examination. According to the watchdog, both companies’ charge increases were probably “unduly high,” resulting in additional costs of 150–200 million pounds for UK businesses.
Transactions Between UK And Europe
The PSR would initially impose a time-limited restriction of 0.2% on debit transactions and 0.3% on credit transactions between the UK and the European Economic Area. After additional analysis is completed, a permanent cap will be implemented.
Source: cbs News
According to a Visa representative, the corporation vehemently disagrees with the PSR’s interim report’s conclusions and believes the suggested fixes are “not justified”.
“Accepting reliable, secure, and innovative digital payments represents enormous value to UK businesses, especially when selling overseas,” a spokeswoman stated.
“These interchange rates apply to less than 2% of UK card payments – European (EEA) cardholders buying online from a UK seller – and reflect the fact that these transactions are more complex and carry far greater risk of fraud.”
