Revolut and Visa have initiated legal challenges against the Payment Systems Regulator (PSR) regarding the regulator’s decision to impose a cap on interchange fees for cross-border online payments, as reported by the Financial Times.
Last year, the PSR moved forward with plans to implement a price cap on the fees charged by Visa and Mastercard to UK merchants for online purchases made by European customers. The regulator justified this decision by noting that both companies had increased their cross-border interchange fees fivefold between 2021 and 2022, with debit card fees rising from 0.2% to 1.15% and credit card fees from 0.3% to 1.5%. This post-Brexit hike is reportedly costing UK businesses an additional £150-200 million annually.
In response, Revolut has sought a judicial review of the PSR’s decision, as outlined by the Financial Times. A representative from Revolut stated, “We disagree with the PSR’s assessment and believe it has acted beyond its statutory powers in imposing these caps. We have therefore requested the court to review, and ultimately overturn the PSR’s decision.”
Visa echoed the sentiment, emphasizing, “We respect the PSR’s role as an economic regulator. This narrow legal action focuses solely on the PSR’s legal authorization and the process related to price setting, ensuring a fair and thorough review to provide clarity for the industry. This is crucial for future growth and investment in the UK.”
According to sources cited by the Financial Times, the PSR plans to defend its decision “robustly.” Earlier this week, the PSR announced it would take action against Visa and Mastercard regarding significant increases in processing fees for domestic payments.