UK-EEA cross-border interchange cap, May 2026 status
The PSR's power to cap UK-EEA cross-border consumer-card interchange fees was upheld by the High Court on 15 January 2026. The Court of Appeal then granted Visa and Mastercard permission to appeal a separate parallel ruling on 17 March 2026. As of May 2026 the PSR has the legal power but has not yet set a cap level. Rates remain at 1.15% (debit) and 1.5% (credit) on card-not-present.
Where we are, in plain English
Brexit removed UK-EEA card transactions from the European Interchange Fee Regulation's 0.2% (debit) and 0.3% (credit) cap. Visa and Mastercard moved to default cross-border rates of 1.15% and 1.5% on card-not-present consumer transactions. The PSR ran a market review (MR22/2.8) and proposed a remedy in 2023. Visa, Mastercard and Revolut judicially reviewed the PSR's power to set such a cap. The High Court dismissed all three challenges on 15 January 2026. Visa and Mastercard then secured permission to appeal a parallel 2024 Competition Appeal Tribunal ruling on 17 March 2026. The PSR has consulted on cap methodology and is yet to publish a final cap level.
Timeline
| Date | Event |
|---|---|
| 2015 | EU Interchange Fee Regulation caps intra-EEA consumer card interchange at 0.2% (debit) and 0.3% (credit). |
| January 2021 | UK formally outside the IFR. UK-EEA card flows reclassified as cross-border. |
| 2021-2022 | Visa and Mastercard increase cross-border consumer-card-not-present rates to 1.15% and 1.5%. |
| 2022-2023 | PSR opens market review MR22/2. |
| December 2024 | PSR publishes Stage 1 consultation (CP24/14) on cross-border interchange remedies. |
| 2025 | PSR drops Stage 1 interim cap, consults on Stage 2 methodology (MR22/2.8, October 2025; comments closed 21 November 2025). |
| 15 January 2026 | High Court upholds PSR's power to cap UK-EEA cross-border interchange. All three judicial review claims dismissed. |
| 17 March 2026 | Court of Appeal grants Visa and Mastercard permission to appeal a separate 2024 Competition Appeal Tribunal ruling on multilateral interchange fees. |
| As of May 2026 | PSR has legal power, has not set a final cap level. Cross-border rates remain at 1.15% and 1.5%. |
Current cross-border rates (May 2026)
| Transaction type | Pre-Brexit (IFR) | Current cross-border |
|---|---|---|
| Consumer debit, card-not-present | 0.2% | 1.15% |
| Consumer credit, card-not-present | 0.3% | 1.5% |
| Consumer debit, card-present | 0.2% | Variable; lower than CNP, scheme-dependent |
| Commercial cards | Not capped | Materially higher; not in scope of the PSR cap |
Rates apply to UK merchants taking EEA-issued consumer cards online and to EEA merchants taking UK-issued consumer cards online. Card-present rates are lower and outside the PSR's primary remedy scope.
Merchant impact
The cost is real but unevenly distributed. Tourist-heavy UK merchants and EEA-customer-heavy online businesses bear most of the load. A London hotel where 30% of card revenue is on EEA-issued cards pays roughly 0.85 percentage points more on that 30% than under the pre-Brexit cap, before any blending by the acquirer. For a £2m annual hospitality business that is in the order of £5,000 a year just from this one fee component.
Most blended acquirers (Dojo, SumUp, Square) absorb cross-border into one rate, so the merchant does not see it line-itemed. Adyen and Stripe (interchange-plus) typically itemise it. If you want to know how much you are paying, ask for a 90-day fee breakdown by interchange category.
What merchants can do now
- Move to interchange-plus pricing. Above ~£50k monthly card volume, blended pricing typically over-charges and hides the cross-border component. Interchange-plus exposes it and lets you act.
- Add Open Banking as an EEA-customer payment option. Open Banking has no interchange and no cross-border issue. Most UK e-commerce platforms (Shopify, WooCommerce, BigCommerce) support it.
- Write a pass-through clause into your acquirer contract. If the PSR caps cross-border interchange, you want any reduction passed to you, not absorbed by the acquirer.
- Track the PSR. The PSR publishes its consultation responses and intended final-cap timing on psr.org.uk. We will update this page when a cap level is set.
What happens next
Two threads run in parallel. The PSR's Stage 2 cap process is technically separate from the Visa/Mastercard appeal in the multilateral interchange case. Pragmatically, the PSR is unlikely to land a final cap until the Court of Appeal hearing in the multilateral case is heard and judgment is given, because the legal reasoning could overlap. We expect a final PSR cap level to be set in the second half of 2026 at earliest, with implementation 6-12 months after.
Frequently asked questions
What is "cross-border interchange"?
When a UK merchant accepts a card issued in the European Economic Area (or vice versa), the issuer charges an interchange fee that the acquirer passes to the merchant via the Merchant Service Charge. Since Brexit, these are "cross-border" rather than "intra-EEA" and have risen sharply.
What are the current cross-border interchange rates?
On UK-issued cards used at EEA merchants (and EEA-issued cards used at UK merchants), Visa and Mastercard set 1.15% on consumer debit and 1.5% on consumer credit for card-not-present (online) transactions. Pre-Brexit caps were 0.2% and 0.3% under the EU Interchange Fee Regulation. The fees increased after the IFR ceased to apply between the UK and EEA in 2020.
Has the PSR capped the rates yet?
No, not as of May 2026. The PSR has confirmed in court (15 January 2026) that it has the legal power to do so, but it has not yet set the level of any cap. The PSR consulted on a methodology in October 2025; final cap-setting follows. The Court of Appeal granted Visa and Mastercard permission to appeal a separate 2024 multilateral interchange fee ruling on 17 March 2026, which adds further uncertainty.
Who pays cross-border interchange?
The merchant. It flows through the Merchant Service Charge. Some acquirers (Adyen, Stripe interchange-plus) itemise it; most "blended" acquirers (SumUp, Square, Dojo on Go) absorb it into a single rate.
Which UK merchants are most affected?
Tourism-heavy UK merchants (London hospitality, hotels, attractions), online merchants serving EEA customers, and any UK e-commerce business with a meaningful EEA customer base. The hit on a London hotel taking 30% of revenue from EEA-issued cards is material.
When will the cap actually take effect?
The PSR has not given a date as of May 2026. The October 2025 consultation closed in November 2025 and the PSR has yet to publish a final cap level. The pending Visa/Mastercard appeal in the parallel multilateral interchange case may be heard in late 2026; the cross-border cap process is technically separate but pragmatically intertwined.
What can merchants do in the meantime?
Three levers: (1) move to interchange-plus pricing if you are over £50k monthly card volume, this exposes the cross-border component instead of hiding it; (2) explore Open Banking for EEA customers (no interchange); (3) make sure your acquirer is passing on any future PSR-mandated reduction (write the term into your contract).
Does Brexit explain all of this?
Yes, mechanically. The EU Interchange Fee Regulation set 0.2% and 0.3% caps on intra-EEA consumer card interchange. After Brexit, UK-EEA flows became "cross-border". Visa and Mastercard moved to higher cross-border defaults (1.15% and 1.5%) which are not capped under EU law (because the UK is no longer in the EEA) and not yet capped under UK law (because the PSR has not set a level).
Director, AcceptCard
Oliver leads AcceptCard's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 7 May 2026