Credit card company Mastercard is to increase the fees it charges merchants when cardholders in the United Kingdom buy goods and services from the European Union (EU).
The increase in costs is a result of the UK’s departure from the EU, with cross-Channel card fees no longer falling under an EU cap on transaction fees.
The hike could affect airlines, hotels, car rentals and holiday firms based in the EU, with consumer prices potentially rising if traders choose to pass on those costs.
How much will fees rise by?
The change affects the “interchange” fees Mastercard sets on behalf of big bans, allowing Mastercard holders to use the payment networks.
Credit card charges will increase fivefold, rising from 0.3 per cent to 1.5 per cent of the value of the purchase. Debit card fees will increase from 0.2 per cent to 1.15 per cent, according to reports in Financial Times.
The EU cap on fees was introduced in 2015 because of concerns about prices being pushed up for consumers.
Mastercard has said that, after the end of Brexit transition period, the cap on fees no longer applied to many payments between the EU and the UK.
“As a result of the UK leaving the EEA, Mastercard will adapt interchange rates on UK cards to the commitments it gave the European Commission in 2019 for non-EEA card transactions,” the company said.
"In practice, only EEA merchants making e-commerce sales to UK cardholders will see a change."