UK-EEA cross-border interchange: where we are in May 2026
The PSR capped UK-EEA cross-border interchange at 0.2% (debit) and 0.3% (credit) in January 2026, matching the regulated UK domestic rates. Visa and Mastercard appealed; the Court of Appeal heard the case on 17 March 2026. Judgment expected summer 2026. Until then, merchants on IC+ pricing pay the pre-cap rates of 1.15% to 1.50% on EEA-issued transactions; merchants on blended pay an invisible blended cost.
The story in three acts
Act 1: Brexit and the rate hike (2021)
Pre-Brexit, UK-EEA card transactions sat under the EU Interchange Fee Regulation. Cross-border interchange was capped at 0.2% (debit) and 0.3% (credit), the same as domestic. After 31 January 2020 (UK exit) and the end of the transition period (31 December 2020), the UK was no longer in the EU regulatory perimeter. Visa and Mastercard raised UK-EEA cross-border interchange in 2021 to 1.15% (debit) and 1.50% (credit), a 5x to 6x increase.
Act 2: PSR market review (2022-2025)
The Payment Systems Regulator opened a market review in 2022. The review concluded that Visa and Mastercard had market power and were charging unduly high cross-border interchange. The PSR issued final remedies in January 2026 capping UK-EEA cross-border at the regulated UK domestic rates (0.2% debit, 0.3% credit).
Act 3: the appeal (2026)
Visa and Mastercard appealed to the Competition Appeal Tribunal. The CAT issued a partial judgment, upholding parts of the PSR decision but suspending the cap pending appeal. The case went to the Court of Appeal, which heard the case on 17 March 2026. Judgment expected summer 2026.
Who gains and who loses
| Party | Current state | If cap holds |
|---|---|---|
| UK merchants | Pay 1.15-1.50% on EEA-issued transactions | Pay 0.2-0.3%; £150-£200m saved across all UK merchants annually |
| Visa and Mastercard | Collect higher cross-border interchange | Lower revenue from UK-EEA flow; potential precedent for other corridors |
| EEA-issuing banks | Receive higher interchange on UK-bound transactions | Receive lower interchange; reduced cross-border revenue |
| UK acquirers (Stripe, Adyen, Worldpay) | Pass through current rates | Pass through lower rates; competitive pressure to reflect saving in markups |
| UK consumers (cardholders) | Indirect: higher merchant costs feed prices | Indirect: marginal price effect from merchant savings |
The broker-vs-bank perspective
The dispute is not just merchant-vs-scheme. It is a structural argument about how interchange should be set in a post-Brexit UK:
- Broker view (acquirers, merchant trade bodies): interchange should reflect actual processing cost plus a reasonable margin. Cross-border processing is not 5x more expensive than domestic; the higher rate is rent extraction.
- Bank view (Visa, Mastercard, issuing banks): cross-border interchange covers fraud risk, fx volatility, and cross-jurisdictional regulation. The pre-2021 EU rate was a regulated subsidy, not a cost-reflective price; removing it merely reflects underlying economics.
- PSR view: Visa and Mastercard had not produced evidence justifying the 5x-6x hike. The hike was made because the regulatory cap was lifted, not because costs changed.
- Court of Appeal view: to be decided. The 17 March hearing focused on whether the PSR was within its statutory powers and whether the remedies were proportionate.
Merchant impact: blended vs IC+
Whether you feel the cross-border cost depends on your pricing model:
If you are on blended (SumUp, Square, Stripe blended, Dojo blended)
The cross-border rate is invisible. Your acquirer absorbs the higher cost into the blended rate. You pay the same 1.69% or 1.75% per transaction regardless of whether the cardholder is UK or EEA. If the cap takes effect, you do not directly benefit; the acquirer benefits unless competition forces the saving through.
If you are on IC+ (Adyen, Stripe custom, Worldpay, Barclaycard)
The cross-border rate is line-by-line on the statement. Every EEA-issued transaction shows the full 1.15-1.50% interchange. If the cap takes effect, your IC+ rate updates automatically (provided your contract specifies "interchange-plus"; check for fixed-rate clauses). The saving lands directly in your account.
Calculate the at-risk fee
Three steps to know your exposure:
- Pull EEA-issuer transactions. Acquirer statement should tag transactions by issuer country. If yours does not, ask the acquirer for the breakdown.
- Calculate gap. EEA volume × (current cross-border rate minus 0.2% or 0.3%).
- Annualise. Multiply by 12.
Worked example: a UK e-commerce merchant with £15k/month EEA volume on consumer-credit cards. Current rate 1.50%; capped rate 0.30%. Gap is 1.20%. Monthly cost: £180. Annual: £2,160. If the cap holds, that is the immediate annual saving.
What to do today
- Identify your EEA mix. If above 10% of volume, the cross-border issue is material.
- Move to IC+ if you are on blended and have material EEA mix. The transparency lets you act on the future cap or renegotiate now.
- Add a contract clause. If signing a new IC+ deal, ensure the interchange pass-through is automatic for any regulatory rate change. Some acquirer contracts have "rate freeze" clauses that defeat the purpose.
- Track the appeal outcome. Court of Appeal judgment summer 2026.
- Be ready to renegotiate. If the cap holds, your acquirer will pass through some saving but may try to widen the markup. The UK acquirer market is competitive; quote alternatives if your current acquirer drags.
What to expect 2026-2027
Three plausible trajectories:
- Cap holds (40% probability). Court of Appeal upholds the PSR remedies. Cross-border rates drop to UK domestic levels. UK merchants save £150-£200m a year. Visa and Mastercard appeal further to the Supreme Court (adding 12-18 months).
- Cap falls (35% probability). Court of Appeal sides with Visa and Mastercard. Cross-border rates remain at 1.15-1.50%. PSR forced to redesign remedies; possible 12-month delay before a new cap is attempted.
- Negotiated settlement (25% probability). The schemes propose a lower-than-current but higher-than-domestic rate (e.g. 0.5% to 0.7%) and the PSR accepts. Settlement avoids further litigation.
In all three scenarios, having clean IC+ statements lets you act on the change immediately when it happens.
Cross-link: related learn pages
Frequently asked questions
What is cross-border interchange?
When a UK cardholder buys from a UK merchant, that is a domestic transaction with regulated interchange (0.2% debit, 0.3% credit). When an EEA-issued cardholder (German, French, Spanish etc) buys from a UK merchant, that is cross-border. Cross-border interchange has historically been higher (1.15% debit, 1.50% credit) since 2021, when Visa and Mastercard raised it after the UK left the EU regulatory perimeter.
What did the Payment Systems Regulator do in January 2026?
The PSR issued final remedies capping UK-EEA cross-border interchange at 0.2% (debit) and 0.3% (credit), matching the regulated UK domestic rate. The remedies were the result of a multi-year market review concluding that Visa and Mastercard had market power and the post-Brexit cross-border rates were unduly high.
Did the cap take effect?
Partly. Visa and Mastercard appealed the PSR remedies. The Competition Appeal Tribunal heard the case at first instance and upheld parts of the PSR decision but suspended the cap pending the Court of Appeal hearing. As of May 2026 the cap is in legal flux; Visa and Mastercard continue to charge the higher cross-border rates pending the appeal outcome.
When does the Court of Appeal decide?
The Court of Appeal heard the case on 17 March 2026. The judgment is expected in summer 2026 (typically 8-16 weeks post-hearing). Until the judgment, UK merchants pay the pre-cap cross-border rates. If the appeal fails, the cap takes effect retrospectively or prospectively depending on the judgment's remedy.
How much does this cost UK merchants today?
For a UK merchant on blended pricing, the cross-border rate is invisible (the acquirer absorbs it). For an IC+ merchant, every EEA-issued transaction pays the full 1.15% to 1.50% interchange. UK merchants with significant EEA-customer mix (e-commerce shipping to Europe, hospitality serving EU tourists, B2B trade with EU clients) feel the cost directly. The Office for National Statistics estimated UK merchants paid £150m-£200m in extra cross-border fees in 2024-2025.
How is this different from your other cross-border guide?
Our /learn/cross-border-interchange-uk-2026/ page covers the practical merchant fee impact and case-handling. This page covers the broker-vs-bank perspective: who is gaining what, what the strategic shape of the dispute is, and how the appeal outcome affects merchant choice. The two pages are complementary; this one is for merchants who want to understand the political-commercial dynamics.
Should I switch acquirers because of this?
Probably not just for cross-border, unless your EEA mix is material (>30% of volume). For most UK SMBs, the cross-border issue is a £20-£200/month line item that is dwarfed by the choice of pricing model (IC+ vs blended) on domestic volume. If you do have material EEA mix, ensure your acquirer is on IC+ so you see the cross-border rate transparently and can act on it.
Could the EU strike back?
Possibly. The European Commission has its own ongoing review of cross-border interchange and could mirror the PSR cap or impose its own. The UK and EU central banks have separate mandates but talk regularly. The most likely outcome over 2026-2027 is a UK-EU coordinated cap (matching the regulated domestic rates on both sides) rather than asymmetric caps that drive arbitrage.
Material EEA mix? Get IC+ quotes from UK acquirers
If a meaningful share of your volume is EEA-issued, IC+ pricing is the only model that lets you see and act on the cross-border rate. Our matcher surfaces UK acquirers offering IC+ with automatic interchange pass-through. No obligation, no upfront fees.
Open quote form →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: 10 May 2026