MasterCard has imposed a five-fold increase on credit card interchange fees charged for UK online purchases from the EU, following Britain’s withdrawal from the European Union.
Prior to Brexit, UK merchants and cardholders benefitted from a 0.3% cap on credit card interchange fees imposed by the European Commission.
But with the country withdrawing from Europe, these fees will increase to 1.5%, as payments between the UK and the European Economic Area are now deemed “inter-regional”.
The fee for debit card payments is also set to rise from 0.2% to 1.15%.
The increase in fees is another blow to UK merchants and consumers as they grapple with reams of red tape covering VAT and customs charges for exports and deliveries to European markets.
MP Kevin Hollinrake, who chairs the all-party parliamentary group on Fair Business Banking, said the move “smacks of opportunism.”
“I would urge the regulators to step in as a matter of urgency to ensure that financial institutions do not use Brexit as an opportunity to hike up costs that consumers will ultimately bear,” he told the FT.