A London judge cleared the way for UK regulators to
cap cross-border card fees, handing a legal defeat to Mastercard, Visa and
Revolut in a closely watched challenge over the cost of online payments between
the UK and Europe, Bloomberg reported.

The ruling keeps pressure on card schemes and fintechs
over interchange charges on transactions where European consumers buy from UK
merchants, even though the precise cap level and implementation timetable
remain undecided.

Court Ruling on Payment Systems Regulator’s Powers

The dispute centred on the UK Payment
Systems Regulator’s decision to consult on restoring a cap on cross-border
interchange fees that applied when EU customers used cards to buy online from
UK businesses.

The PSR launched that consultation in December 2024
after warning that Mastercard and Visa had raised relevant fees to an “unduly
high level” following Brexit, when earlier EU limits stopped covering many
UK–EU transactions.

Related: Visa and Mastercard to Pay Nearly $200M in Decade-Long Merchant Class Action

Mastercard, Visa and Revolut took the case to London’s
High Court, arguing the PSR did not have legal power to impose price caps on
those fees.

They challenged the watchdog’s authority to set any
ceiling and questioned whether it could proceed before finalising the level and
timing of the proposed limits.

Judge Dismisses Challenge

Judge John Cavanagh rejected the companies’ arguments
and ruled that the PSR does have the power to introduce the proposed price caps
on cross-border interchange fees.

Mastercard, Visa and UK fintech Revolut lost a lawsuit with the UK payments regulator over its plans to usher in a cap on cross-border card fees. https://t.co/zqlr1msTSn

— Bloomberg (@business) January 15, 2026

The judgment allows the regulator to continue its work
on the cap design without a legal block, although it still needs to decide the
specific rate and when to bring it into force.

The PSR has previously said that recent fee increases
left UK merchants facing higher costs when European customers shop online,
which it views as unfair and harmful to competition.

PSR managing director David Geale welcomed the
outcome, saying the decision confirms the regulator’s powers to ensure card
payment costs are fair for UK businesses and consumers.

Industry Response and Broader Context

Visa had
previously said it disputed the PSR’s findings and warned that price caps can
negatively affect the value people and businesses get from card payments.

Meanwhile, Visa and Mastercard proposed a $38 billion settlement in the US last year to end
a legal battle stretching over two decades. It aimed at resolving claims
that the companies colluded to charge merchants excessively high credit card
“swipe fees.”

The offer came months after U.S. District Judge Margo Brodie rejected a previous $30 billion deal, calling it “paltry” compared with the fees Visa and Mastercard continue to collect from merchants.

This article was written by Jared Kirui at www.financemagnates.com.

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