Mastercard has imposed a five-fold increase on credit card interchange fees charged for UK online purchases from the EU, following Britain's withdrawal from the European Union.
Prior to Brexit, UK merchants and card holders benefitted from a 0.3% cap on credit card intechange fees imposed by the European Commission.
But with the country withdrawing from Europe, these fees wil increase to 1.5%, as payments between the UK and the European Economic Area are now deemed “inter-regional”.
The fee for debit card payments is also set to rise from 0.2% to 1.15%.
The increase in fees, set for introduction on 15 October, is another blow to UK merchants and consumers, who are already struggling with reams of red tape covering VAT and customs charges for exports and deliveries to European markets.
MP Kevin Hollinrake, who chairs the all-party parliamentary group on Fair Business Banking, said the move "smacks of opportunism".
"I would urge the regulators to step in as a matter of urgency to ensure that financial institutions do not use Brexit as an opportunity to hike up costs that consumers will ultimately bear," he told the FT.
In response, Mastercard points out that this level of interchange is paid by EEA merchants on all cards issued outside of the EEA, and there is no evidence European businesses charge consumers in these markets higher prices than consumers in the EEA as a result.
“As a result of the UK leaving the European Economic Area (EEA), Mastercard will adapt interchange rates on UK cards to the commitments it gave the European Commission in 2019 for non-EEA card transactions," states the card scheme. "In practice, only EEA merchants making e-commerce sales to UK cardholders will see a change. Interchange is not a consumer facing cost but the fees paid between merchants and banks for the provision of payments. Consumers should not feel any impact of changes in interchange fees.”