UK interchange caps and the PSR review of UK to EEA card payments

Part of Fees and rules by country. See the guides for every market we cover.

If you sell to customers in the UK, your card costs are set partly by regulation. If you sell online to customers in the European Economic Area, they are set partly by a gap in regulation that has been the subject of an official review.

This guide explains the two sets of rules, shows what the difference costs on a realistic example, summarises what the Payment Systems Regulator (PSR) has proposed and says what merchants should do while the position settles. It is general information based on the sources listed, not legal or financial advice. The regulatory position changes, so always check the PSR's own publications.

What are the UK domestic interchange caps?

For many years the EU Interchange Fee Regulation capped the interchange fee on consumer cards at 0.2% of the transaction for debit and 0.3% for credit. The UK kept those caps for domestic transactions after leaving the EU.

These caps are the reason UK consumer card payments are comparatively cheap to accept. A shop taking mostly UK consumer debit cards pays 0.2% in interchange on those payments. See interchange fees explained for how interchange fits into the full cost, and debit, credit and commercial card fees for how card type changes the picture.

What is the UK to EEA card-not-present gap?

After Brexit, payments between the UK and the EEA stopped being domestic for the purpose of the EU caps. The caps no longer applied to card-not-present payments (online, phone and mail order) where the card was issued in one place and the merchant was in the other. Card schemes set their own rates for these payments, and they rose sharply.

According to the PSR's review as reported by law firms, the rates for UK to EEA card-not-present payments increased from 0.2% to 1.15% for consumer debit, and from 0.3% to 1.5% for consumer credit. The PSR estimated that the increase cost UK acquirers an additional £150 million to £200 million a year in 2022 and 2023.

In-person payments are not affected in the same way. The gap applies to card-not-present payments, which is why online merchants are most exposed.

What does the gap cost? A worked example

A UK online retailer sells to EEA customers. In a month it takes £10,000 from EEA customers paying by consumer debit card and £5,000 by consumer credit card, all card-not-present.

On this example, the same sales cost £155.00 a month more in interchange alone, or £1,860 a year. That is a rise from 0.23% to 1.27% of turnover on these payments, before the provider's own markup and scheme fees.

Whether the merchant sees that cost directly depends on the pricing model. On interchange plus pricing it appears as higher interchange lines. On blended or flat-rate pricing the provider may absorb it, raise the blended rate or add a surcharge for EEA cards.

What has the PSR proposed?

The PSR carried out a market review of cross-border interchange fees and, in December 2024, published a consultation setting out proposed remedies. Law firms summarising it report that:

• The PSR considered several remedies, including changes to scheme rules and a price cap.
• It said a price cap was the only remedy likely to be effective.
• It proposed a two-stage approach: an initial time-limited cap for a transition period, with the PSR considering 0.2% for card-not-present consumer debit and 0.3% for consumer credit, and a longer-term approach after that.

What has happened since is less clear from the sources we reviewed. One business-data site reports that the PSR declined an interim cap in October 2025, that the High Court confirmed the PSR's legal power to impose a cap in January 2026, and that a final decision was expected in late 2026 or the first half of 2027. We could not confirm those dates against a primary source, and other results were undated or out of date. Treat the timeline as unconfirmed, and check the PSR's website for the current position.

What does it mean for merchants?

If you only sell in person in the UK

You are largely unaffected by the cross-border question. Your consumer card interchange is capped at 0.2% and 0.3% on domestic payments. What matters more is the markup, the fixed fees and the contract. See UK card machine fees.

If you sell online to EEA customers

This is where the issue bites. Ask your provider:

• How are UK to EEA card-not-present payments priced on my account?
• Is the higher interchange passed through at cost, or is it built into my rate?
• If the cap is introduced, will the saving be passed on to me, and when?
• Do you separate EEA payments on my statement so I can see the cost?

If your provider cannot show the EEA payments separately, ask for a breakdown, because without it you cannot tell whether you are being charged fairly. Our guide to the bill check also helps you spot gaps between the statement and the amount charged.

If you are on a blended or flat rate

Providers on blended or flat rates take on the risk that costs change. If the cost of EEA payments drops because of a cap, a provider on a flat rate is not obliged to pass the saving on unless the contract says so. This is an argument for asking at renewal whether your rate reflects current costs. See interchange plus, blended and flat rate.

How do you find your cross-border payments?

On an interchange plus statement, look for lines that separate:

• Domestic and non-domestic (or EEA and non-EEA) payments
• Card-present and card-not-present
• Consumer and commercial cards

If your statement does not break these out, ask your provider for a report. Cross-border payments often show up as a separate line with a higher rate. Compare the rate with the reported 1.15% and 1.5% for consumer debit and credit, remembering that scheme fees and the provider's markup are on top.

For consultants

Online merchants with EEA sales are a good conversation. Ask what share of their card turnover is from EEA customers, and whether the statement shows it. A merchant who does not know the answer has a question worth investigating, and a provider that cannot show it has some explaining to do. Be careful not to promise a saving from a cap that has not been confirmed. Frame it as a reason to review the pricing and to make sure any future reduction is passed on. The checkmyrates calculator lets you enter international and cross-border card turnover as its own line.

Frequently asked questions

What is the UK interchange cap?

Consumer debit interchange on domestic payments is capped at 0.2% and consumer credit at 0.3%. Commercial cards are not covered by the same cap.

Why do UK to EEA online payments cost more?

After Brexit, card-not-present payments between the UK and the EEA stopped counting as domestic for the EU caps, so the card schemes' higher rates applied. They are reported at 1.15% for consumer debit and 1.5% for consumer credit.

Has the PSR capped UK to EEA interchange?

The PSR proposed a two-stage price cap in its consultation, starting at the old EU levels. The final position should be checked on the PSR's website, as the outcome was still developing when we wrote this.

Does the cap affect in-person card payments?

The cross-border issue applies to card-not-present payments. In-person domestic consumer payments remain capped at 0.2% and 0.3%.

Will my provider pass on any saving?

On interchange plus pricing, usually yes, because the interchange is shown separately. On blended or flat rates, only if your contract says so, so it is worth asking.

Where can I check the latest position?

The Payment Systems Regulator publishes its decisions and consultations on its website. Check there before relying on any figure in this guide.

Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.