Mastercard is preparing to increase fees charged to EU merchants when British cardholders buy their goods online by at least 400 percent, a move it said is being made due to Brexit and could lead to higher prices for consumers should merchants decide to pass on the higher costs of e-commerce transactions.
“As a result of the U.K. leaving the EEA (European Economic Area), Mastercard will adapt interchange rates on U.K. cards to the commitments it gave the European Commission in 2019 for non-EEA card transactions,” Mastercard said. “In practice, only EEA merchants making e-commerce sales to U.K. cardholders will see a change.”
When a credit or debit card is used, merchants pay an interchange fee to the bank that issued the card. In an effort to reduce costs for both retailers and consumers and to help create an EU-wide payments market, in 2015 the EU capped fees for the use of payment cards issued in the EEA to 0.3 percent for credit cards and 0.2 percent for debit cards. Mastercard has told retailers the rates will increase to 1.5 percent and 1.15 percent, respectively, as of Oct. 15, in line with the ceiling the EU set on the use of non-EEA cards in 2019.
Visa, which is subject to the same limits on interchange fees, has thus far not announced an increase. Should it decide that an increase in fees is warranted, Visa said it would seek to provide clients with advance notice so that they could plan ahead.