Brexit reset at risk if you cap card fees, EU lawmakers warn UK
Plan to cap card fees would place EU companies at “distinct disadvantage” and risk “undermining" the overhaul of ties.
Thawing post-Brexit relations are under threat if the U.K. does not rethink a proposed cap on card transaction fees, European lawmakers are warning London.
British Prime Minister Keir Starmer heads to Brussels Wednesday to meet European Commission President Ursula von der Leyen as both sides aim for a “reset” after years of post-Brexit acrimony under the Conservatives.
But a letter from Members of the European Parliament to Britain’s new Labour City Minister Tulip Siddiq demands a rethink of a proposed cap on how much Visa and Mastercard can charge for card payments.
They say the plan would place EU companies at “distinct disadvantage” and risk “undermining” the overhaul of ties.
The letter, from seven MEPs representing different countries and parties within the EU’s legislative body, was sent on Sept. 20 and seen by POLITICO.
Britain’s Payment Systems Regulator (PSR) wants to reapply a pre-Brexit cap on interchange fees — which are set by Visa and Mastercard on behalf of banks — for online purchases made by European cardholders at U.K. retailers.
It believes U.K. businesses are overpaying on fees for cross-border transactions.
But the EU’s payments industry has already branded the U.K. plans “potentially discriminatory” and warned they will “negatively impact EU consumers” by forcing European card providers to absorb more cost than their U.K. counterparts.
That is echoed in the latest letter to Siddiq and the PSR. “We strongly believe that both the EU and the U.K. are committed to strengthening our post-Brexit relationships,” the MEPs write. “However, unilateral actions like this risk undermining those commitments.”
They add: “We would note that if the EU decided to retaliate in a similar fashion, U.K. payment companies and UK consumers would suffer the same negative consequences as those facing their EU counterparts.”
The companies and MEPs argue that costs incurred by EU issuers — financial firms like banks or payment companies — for enabling such transactions often exceed that cap, so they would end up losing money.
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