Revolut and Visa bring legal challenges against UK payments regulator
Revolut and Visa challenge the UK’s PSR over a proposed cap on international transaction fees, arguing the regulator overstepped its powers. European banks and fintechs claim the cap will make them lose money post-Brexit. Both seek a judicial review for a fair process.
Regulatory pressure mounts
Revolut and Visa have brought legal challenges against the UK's Payment Systems Regulator (PSR), accusing the watchdog of overstepping its powers with a proposed cap on international digital transaction fees. The move piles pressure on the PSR as the UK government reviews the regulatory framework to remove red tape and boost growth.
Industry backlash
The PSR proposed the cap on interchange fees, which are levied by Visa and Mastercard on behalf of banks for online cross-border payments, after it found that the fees had risen more than five-fold since Brexit. The cap was intended to save UK businesses from overpaying, but it has enraged European banks and fintechs, which claim it will make them lose money on each transaction because they have higher operating costs.
Legal action details
Revolut's European arm has appealed for a judicial review, stating, "We disagree with the PSR's analysis and believe it has exceeded its statutory remit." Visa is also recognizing the PSR's role but insisting on the legal requirement and process on price setting to ensure a fair and complete process. Both companies are seeking to gain clarity in the regulatory landscape, which is paramount to future investment and growth in the UK.
A source familiar with the thinking of the PSR stated that the regulator believes it has the legal authority to impose the cap and is prepared to strongly defend itself in court.
