On January 15, 2026, a London High Court judge ruled that Mastercard, Visa and Revolut had failed to overturn the Payments Systems Regulator’s (PSR) proposal to cap cross‑border interchange fees. The decision confirms the PSR’s statutory authority to set price limits on fees that merchants pay when UK cardholders use cards issued in the European Economic Area. The ruling is a significant regulatory setback for the three card schemes, which have long argued that higher interchange rates are necessary to fund fraud‑prevention technology and support the growth of e‑commerce.
The PSR had announced in December 2024 that it would consult on capping cross‑border interchange fees after the UK left the EU. The removal of the EU Interchange Fee Regulation allowed Mastercard and Visa to raise fees for card‑not‑present transactions from 0.2% to 1.15% for debit cards and from 0.3% to 1.5% for credit cards. The regulator’s interim cap proposal, still under discussion, would set the fee at 0.2% for debit and 0.3% for credit transactions, with a longer‑term cap to follow after further analysis.
Financially, the ruling could reduce the fee‑based revenue of the three schemes. Visa’s full‑year 2025 net revenue reached $40.0 billion, up 11% from the prior year, while Mastercard’s Q4 2025 revenue is expected to hit $7.38 billion, a 12% increase. Revolut reported group revenues of $4.0 billion in 2024, a 72% jump from $2.2 billion in 2023, and a pre‑tax profit of $1.4 billion. A cap on cross‑border fees would cut a sizable portion of these companies’ income streams, potentially tightening margins and affecting future investment plans.
The High Court decision also reinforces the PSR’s broader mandate to protect UK merchants and consumers. PSR Managing Director David Geale said the ruling “confirms our powers to ensure card payment costs are fair for UK businesses and consumers” and will allow the regulator to pursue further work on fee setting. The ruling follows a June 2025 Competition Appeal Tribunal decision that found Visa’s and Mastercard’s default interchange fee structures to be anti‑competitive, adding legal pressure on the schemes to adjust their pricing models.
Revolut’s European entity had sought a judicial review, arguing the PSR had exceeded its statutory powers. The court’s rejection of the challenge means Revolut will have to accept the cap, which could reduce its fee income but may be offset by its diversified revenue mix, including subscription services and foreign‑exchange fees. The outcome signals that UK regulators are willing to use both statutory and competition law tools to curb what they see as excessive interchange fees.
For the card‑payment ecosystem, the ruling marks a turning point. While the schemes can still negotiate fees with merchants, the PSR’s authority to impose caps introduces a new layer of regulatory oversight that could reshape fee structures, alter merchant‑scheme relationships, and influence the competitive dynamics of the payments market.
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