Digital bank Revolut, Visa, and MasterCard have faced a legal defeat in the UK, where they challenged a proposed regulatory cap on international transaction interchange fees.

The London High Court ruled on Thursday that the UK's Payment Systems Regulator (PSR) has the authority to impose price caps on cross-border interchange fees. These fees, charged by Visa and MasterCard to banks, have increased significantly since Brexit.

The ruling was issued despite intensive lobbying by fintech companies and banks across Europe. In 2025, Visa and Revolut initiated a judicial review against the regulator, arguing that the PSR had overstepped its authority and that its measures would harm market competition.

Notably, this ruling comes just days after former US President Donald Trump called for capping credit card interest rates at 10%, a move that has sparked strong opposition from the banking and payments industry.

As of the time of writing, Visa, Revolut, and MasterCard have not responded to requests for comment on Thursday's ruling.

In 2023, the PSR found that cross-border online payment interchange fees had increased more than fivefold after Brexit and subsequently proposed setting a price cap for these fees.

The specific standards and implementation date for this price cap have not yet been finalized by the PSR. The UK government has decided to abolish the PSR and merge its functions into the Financial Conduct Authority (FCA).

Cross-border interchange fees are charges incurred when a consumer in one country purchases goods or services from a merchant in another country. The core of this dispute focuses on "card-not-present" transactions such as online shopping.

According to disclosures from the PSR, between 2021 and 2022, MasterCard and Visa increased cross-border interchange fees for online transactions between the UK and the European Economic Area. The fee for debit card transactions rose from 0.2% to 1.15%, while the fee for credit card transactions increased from 0.3% to 1.5%.

The court documents noted that MasterCard and Visa do not directly collect interchange fees themselves, acting only as intermediaries in transactions, but they do charge other types of fees. However, since interchange fees are a key incentive for banks to use their services, the imposition of a price cap would indirectly impact both companies.

A briefing obtained by media outlets revealed that the PSR had previously estimated that the fee increases were costing UK businesses an additional £150 to £200 million per year.

The PSR stated in 2023 that the purpose of setting a price cap was to "protect UK businesses from excessive charges," given ongoing complaints from retailers about the high fees charged by Visa and MasterCard.

However, this proposal has been opposed by a number of European banks and fintech companies that rely on fee revenue. Unlike traditional banks, fintech companies do not have the capacity for large-scale lending operations and are therefore more dependent on payment processing fees.

Media reports earlier indicated that a European banking trade association told the UK Treasury earlier this year that the fee cap would cause them to "lose money on every transaction," as their operational costs would exceed the maximum fee allowed under the cap policy.

European banks and fintech companies argue that the cost of processing payment transactions has increased since the UK left the European Union. The rise of digital wallets like Apple Pay and Google Pay, in particular, has increased their infrastructure costs. These fintech firms also contend that the PSR's decision to cap interchange fees runs counter to the UK government's pro-growth policies and is anti-competitive.