In a significant victory for UK merchants and consumers, the London High Court has upheld the Payment Systems Regulator’s (PSR) authority to impose price caps on cross-border interchange fees.
On January 15, 2026, Judge John Cavanagh rejected a legal challenge brought by Mastercard, Visa, and fintech firm Revolut, confirming the PSR’s powers to regulate fees charged when European consumers make online purchases from UK businesses.
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Background of the Challenge and PSR Concerns The dispute stems from post-Brexit developments where Mastercard and Visa raised cross-border interchange fees—paid by UK merchants to EEA card issuers—for card-not-present (online) transactions to what the PSR deemed an “unduly high level.”
The regulator outlined these concerns in December 2023 and, in December 2024, announced plans to consult on introducing a cap to address the lack of competition and protect UK businesses from excessive costs estimated at £150-200 million annually.
Mastercard, Visa, and Revolut argued that the PSR lacked the legal power to impose such caps, with the specific level and timing still undecided.
Court Ruling and Industry Implications Judge Cavanagh ruled in favor of the PSR, allowing it to proceed with developing and implementing the proposed caps.
PSR Managing Director David Geale welcomed the decision, stating it “confirms our powers to ensure card payment costs are fair for UK businesses and consumers” and enables progress toward setting appropriate fee levels.
Mastercard declined to comment, while Visa and Revolut did not immediately respond. The ruling comes as the UK government plans to abolish the PSR to reduce regulatory burdens, though this decision bolsters its short-term authority.
It supports lower costs for UK e-commerce merchants accepting EEA payments, enhances competition in the payments sector, and may influence similar regulatory efforts elsewhere. No immediate implementation timeline was specified, with the PSR expected to continue consultations.