Visa, Mastercard and Revolut v PSR

On 15 January, the High Court dismissed a judicial review brought by Mastercard, Visa and Revolut against the Payment Systems Regulator, confirming its power to cap cross-border interchange fees.

Interchange fees are paid by a merchant's bank to the cardholder's bank on each card payment, with default rates set by Visa and Mastercard. After Brexit, fees on online purchases by customers in the European Economic Area from UK businesses were no longer capped by EU rules and rose around fivefold. The PSR estimates this costs UK businesses between £150 million and £200 million a year, and in December 2024 it said it would consult on a cap.

The claimants argued that the PSR had no power to impose price caps through a general direction under section 54 of the Financial Services (Banking Reform) Act 2013, and that a CMA market investigation was needed instead. Mastercard and Revolut also argued that section 108 of the Act prevented the PSR from acting. Mr Justice Cavanagh rejected both arguments following a rolled-up hearing in November.

The ruling clears the way for the PSR to set the level of the cap. It is also a clear example of judicial review being used to test the limits of a regulator's powers.