By Tony Winterburn • 25 January 2021 • 19:05
Mastercard Fees To Skyrocket For Brits Who Order From The EU. image: Pexels
Mastercard Fees To Skyrocket For Brits Who Order From The EU.
MASTERCARD has announced a bold post-Brexit move by increasing fees more than fivefold when a British shopper uses a debit or credit card to buy from an EU-based company.
The credit card giant levies an “interchange” fee on behalf of banks for every payment that uses its network. Payments to hotels, airlines, car rentals and holiday companies from UK-based customers will be affected. The move sparked alarm among firms that rely on online payments to keep business going over worries their business models would become overpriced and unattractive for buyers.
Mastercard has attributed the move to the UK leaving the EU and said that only online sales would be affected and that “in practice” UK consumers would not notice the change. The change affects the “interchange” fees Mastercard sets on behalf of big banks so that its customers can use their payment networks.
Mastercard has informed merchants that the cap no longer applies to some transactions post-Brexit because payments between the UK and European Economic Area are now deemed “inter-regional”.
From October 15, Mastercard said it would increase these fees to 1.5% on every transaction, up from 0.3%. The EU introduced a cap on such fees in 2015 after concerns they pushed prices up for consumers and unfairly burdened companies.
MP Kevin Hollinrake, who chairs the all-party parliamentary group on Fair Business Banking, called the move “alarming,” adding that it “smacks of opportunism” and has called on regulators to make sure similar companies do not use Brexit for economic gain.
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