Visa and Mastercard have responded to the Treasury Committee on card fee increases on purchases made by UK consumers to European businesses. The fees in question increased from 0.

2% to 1. 15% for debit cards and 0. 3% to 1.

5% for credit card transactions. The European Union Interchange Fee Regulation, which caps interchange fees, no longer applies to cross-border fees following the UK’s exit from the EU. In response to the Committee, both companies argue that higher fees are justified by the greater risk of fraud in cross-border transactions, and the costs incurred by banks to prevent and detect such crime.

The Payment Systems Regulator suggests the market may not be working well Visa and Mastercard also point out that they do not benefit directly from fee increases, as it is a customer’s card issuer, rather than the card payment system, who receive the additional revenue from interchange fees. The Payment Systems Regulator (PSR) previously told the Committee it has not seen ‘evidence that shows that there have been significant changes in the costs’ for card issuers, that could justify the increase in fees. The PSR also recently expressed concerns that these fee rises may demonstrate the market is ‘not working well’ and ‘could result in higher prices paid by UK merchants and consumers’.

.