The regulator revealed yesterday that it would carry out two market reviews focusing on card fees, adding that it would focus on Mastercard and Visa as these two card payment system operators account for 99% of debit and credit card payments in the UK.

The PSR said cross-border interchange fees have increased significantly in the last year. This affects fees for certain card transactions between the UK and the EEA, where the cardholder is not present (such as payments made by phone or online).

Since the UK left the EU, Visa and Mastercard have increased these fees five-fold. The PSR wants to understand the rationale behind these increases and whether they are an indication that the market is not working well. The fee on UK/EU credit card transactions was lifted from 0.3% of the purchase value to 1.5%. At the same time, the fee on debit card transactions was lifted from 0.2% to 1.15%. The higher fees were imposed both on consumers in Britain buying goods and services from the EU and vice versa.

The PSR said that preliminary inquiries had not been able to find an explanation for the increase in price based on volumes, value or mix of transactions.

Natalie Timan, head of strategy at PSR, said: “Cards are the most popular way for consumers to make a payment. To accept card payments, merchants must pay certain fees which can ultimately impact the cost we all pay for goods and services. We want to understand whether card payments are working well and to make sure that merchants, and ultimately consumers, get a good deal.

“We’ve been gathering information since the start of this year and have identified that a detailed review of the market is needed. We have set out what we will assess in these reviews, which will then inform any decisions on the steps we might need to take to promote effective competition or to address any harm.”