The UK Payment Systems Regulator (PSR) has spent three years examining what Visa and Mastercard charge. It has now moved from analysis to binding rules on how the schemes set their fees, and a court has confirmed its power to cap cross-border interchange. For payment leaders in the UK, Europe and the GCC, this affects pricing assumptions, contracts and competitive position.
What the PSR found
In its final market review report on card scheme and processing fees, published in March 2025, the PSR found that these fees, charged by Visa and Mastercard to acquirers and passed on to merchants, had risen by at least 25% in real terms since 2017, with opaque pricing and ineffective competition. It estimated that the increases cost UK acquirers and merchants around £170 million a year. These fees are separate from interchange, which is capped for UK domestic consumer cards at 0.2% for debit and 0.3% for credit.
The remedies
The PSR chose governance and transparency remedies before any price control. On 30 July 2026 it issued Specific Direction 23, which requires Visa and Mastercard to document significant UK pricing decisions, assess their effect on acquirers and competition, appoint senior managers responsible for compliance and report to the PSR each year. In parallel it consulted, in CP26/1, on requiring the schemes to submit regulatory financial reports on their UK card business.
Cross-border interchange
After Brexit, Visa and Mastercard raised interchange on online purchases by UK cardholders from EEA merchants from 0.2% and 0.3% to 1.15% for debit and 1.5% for credit. The PSR concluded these fees were too high and proposed a cap. In January 2026 the High Court rejected a challenge by Visa, Mastercard and Revolut to the PSR's power to impose one. The PSR has dropped plans for an interim cap and is working on the level and timing of a longer-term cap.
Who will enforce it
The Financial Services and Markets Bill 2026, introduced in May 2026, would abolish the PSR and move its functions to the FCA, probably not before 2028. The card fee work is expected to continue under the FCA, so firms should not assume the change of regulator will slow it down.
Why it matters in the GCC
Visa and Mastercard dominate card acceptance in most GCC markets. Saudi Arabia is the main exception, where the domestic mada scheme run by Saudi Payments handles most domestic debit transactions, and domestic schemes such as NAPS in Qatar, BENEFIT in Bahrain and Jaywan in the UAE also matter. International scheme fees are a large part of merchants' acceptance costs in the region, and no GCC regulator has yet run a scheme fee review of the kind the PSR has completed.
GCC groups with UK acquiring businesses are directly exposed to the UK remedies. More broadly, the PSR's method, a market review followed by binding governance and reporting rules, gives other regulators and merchant groups a template they can point to.
What payment firms should do now
Merchants, acquirers and PSPs should audit their cost of acceptance in every market, separating scheme and processing fees from interchange, so they have a baseline for renegotiation. Firms with UK and GCC operations should check card scheme contracts for fee review and most-favoured-customer clauses, because UK changes will not flow through to GCC contracts automatically. Investors in acquiring businesses should model two outcomes: continued pressure on scheme fees through transparency, and a cap on cross-border interchange.