Revolut and Visa launch legal fight against UK payment fee cap

The companies argue the PSR has exceeded its statutory powers with the plan, which aims to limit interchange fees on cross-border online payments.

The PSR’s proposal, introduced in 2023, followed concerns that these fees, levied by Visa and Mastercard on behalf of banks, had increased significantly post-Brexit. The regulator intended to “protect UK businesses from overpaying” after retailers complained about high charges. However, the cap has provoked strong opposition from European banks and fintech firms, who rely on these fees for revenue, the Financial Times reports.

Critics, including a European banking trade body, contend that the cap would force them to operate at a loss, as their operational costs now exceed the permitted maximum fees. They cite increased expenses due to Brexit and the growing use of digital wallets like Apple Pay and Google Pay.

Revolut confirmed its European entity was seeking a judicial review, stating: “We disagree with the PSR’s assessment and believe it has acted beyond its statutory powers in imposing these caps. We have therefore requested the court to review, and ultimately overturn the PSR’s decision.”

Visa said its legal action focused on ensuring a “fair and thorough process” regarding price setting.

The PSR maintains it acted within its legal remit and is prepared to defend its decision robustly in any judicial review. This challenge adds to existing pressure on the PSR, which faced criticism over fraud reimbursement measures last year, amid a wider government review of the UK’s regulatory landscape.