A UK High Court ruling has cleared the way for the country’s payments regulator to pursue limits on cross-border card interchange fees, after dismissing a legal challenge brought by Mastercard, Visa and fintech firm Revolut.
The case centred on the powers of the Payments Systems Regulator (PSR), which announced in late 2024 that it was considering the introduction of fee caps on transactions where European consumers purchase goods online from UK-based merchants. The proposed measures form part of a broader regulatory effort to address concerns that interchange fees on such transactions have risen significantly in recent years.
The three companies sought judicial review, arguing that the PSR did not have the legal competence to impose price controls, particularly in circumstances where the specific parameters of the proposed caps had not yet been finalised. They maintained that the regulator was exceeding its statutory mandate.
In his judgment, High Court Judge John Cavanagh rejected these arguments, concluding that the PSR’s existing powers do extend to the imposition of interchange fee caps where it deems such intervention necessary. The ruling confirms that the regulator is entitled to proceed with its consultation and potential regulatory action.
The PSR has previously stated that fee increases by major card schemes, notably Mastercard and Visa, may have reached levels that are unjustified and detrimental to UK businesses. The issue has attracted heightened scrutiny following the UK’s exit from the European Union, which removed prior EU-level constraints on cross-border interchange fees.
The decision comes against a backdrop of policy uncertainty, as the UK government indicated last year that it intends to abolish the PSR as part of a wider initiative to streamline regulation and support economic growth. Nevertheless, the court’s ruling affirms that the regulator remains fully empowered to act while it continues to operate.
Responding to the judgment, PSR Managing Director David Geale said the outcome reinforces the regulator’s role in safeguarding fair payment costs for businesses and consumers. He added that the decision allows the PSR to advance its work on ensuring that cross-border interchange fees are set at appropriate levels.
Mastercard declined to comment on the ruling, while Visa and Revolut did not immediately issue statements. Visa has previously cautioned that regulatory price caps could undermine the benefits delivered by card payment systems to users and merchants.