An influential committee of UK MPs has written to Visa and Mastercard requesting a justification for recent increases in card transaction fees.
In October 2021, Visa and Mastercard increased cross-border interchange fees on purchases made by UK consumers to European businesses. Fees increased from 0.2 per cent to 1.15 per cent for debit cards and 0.3 per cent to 1.5 per cent for credit card transactions.
While EU regulations which capped these fees no longer apply, the Payment Systems Regulator (PSR) has told the Committee it has not seen “evidence that shows that there have been significant changes in the costs” for card issuers.
The watchdog has opened two market reviews into Visa and Mastercard scheme fees and cross-border interchange charges. In written testimony to the Committee, the PSR writes that it is concerned these fee rises demonstrate the market is “not working well” and “could result in higher prices paid by UK merchants and consumers”.
Commenting on the correspondence, Mel Stride MP, chair of the Treasury Committee, says: “Recent rises in the fees paid by firms for cross-border debit and credit card transactions add additional costs to businesses, many of whom are already grappling with rising inflation and other cost pressures. That’s why we have today written to Visa and Mastercard to request an explanation for these fee increases.”