Mastercard to raise card-not-present interchange for U.K. cards used at EU shops

In a post-Brexit move, Mastercard is raising interchange rates for card-not-present transactions on U.K.-issued cards when spent with European merchants.

The new interchange rates will become effective October 15, 2021 for cards used at merchants within the with European Economic Area, which is defined as the member states of the EU plus three of the four European Free Trade Association (Iceland, Liechtenstein and Norway).

The rates for card-not-present transactions will rise to 1.5% for credit, up from 0.3%; and 1.15% for debit, up from0.2% Interchange for U.K. cards used in-person in Europe and domestically will remain unaffected at 0.3% and 0.2% for credit and debit, respectively.

“In practice, only [European Economic Area] merchants making e-commerce sales to U.K. cardholders will see a change. Interchange is not a consumer facing cost but the fees paid between merchants and banks for the provision of payments," Mastercard said in an emailed statement.

Bloomberg

Mastercard noted that the changes pertain only to interchange and that other fees are not changing.

Mastercard argues that the new rates for card-not-present transactions is the same rate European Economic Area merchants pay when they charge a sale to cards issued in the U.S., Russia or China.

The interchange rate change comes at a time when Mastercard suffered a legal setback in December in a European court. In that case, the U.K. Supreme Court rejected Mastercard’s attempt to force individual lawsuits over claims that the card brand overcharged consumers and harmed competition for more than a decade.

The ruling grants class action status on a £14 billion (about $18.5 billion) interchange lawsuit that could include more than 46 million consumers in the U.K.