High Court Confirms PSR Authority to Cap Cross-Border Card Fees

The High Court has upheld the Payment Systems Regulator’s (PSR) authority to regulate payment systems, backing its powers to impose a cap on cross-border interchange fees. The judgment, delivered on 15 January 2026, represents a significant affirmation of the PSR’s statutory remit and its role in safeguarding competition and service user interests across the UK payments landscape.

The legal challenge arose in response to the PSR’s proposal to cap cross-border interchange fees, following regulatory findings that these charges were excessively high and operating to the detriment of UK businesses. The Court rejected arguments that the PSR had exceeded its powers, confirming that the regulator is acting within its legal mandate when addressing structural pricing issues in payment systems.

This ruling enables the PSR to continue its substantive analysis of what constitutes an appropriate level for cross-border interchange fees. Importantly, it removes a key legal obstacle that could have constrained the regulator’s ability to intervene where market dynamics fail to deliver fair outcomes for merchants and consumers.

From a regulatory perspective, the decision reinforces the PSR’s capacity to take assertive action in areas where payment system economics have material downstream impacts on competition, innovation and end users. It also signals judicial support for an expansive interpretation of the PSR’s powers where intervention is grounded in evidence of market harm.

Commenting on the judgment, David Geale, Managing Director of the PSR, stated that the decision confirms the regulator’s powers to ensure card payment costs are fair for UK businesses and consumers, and allows the PSR to continue its work on setting cross-border interchange fees at an appropriate level.

The PSR has already consulted on the methodology it intends to use to assess a suitable cap for outbound multilateral interchange fees. The outcome of that consultation will now inform the regulator’s next steps, including potential policy interventions. For payment service providers and card schemes, the ruling increases regulatory certainty but also heightens the likelihood of concrete fee controls being implemented in the near term.

Overall, the High Court’s decision represents a clear endorsement of proactive payment systems regulation in the UK, with implications for pricing governance, competitive neutrality and the cost base faced by UK businesses engaging in cross-border card transactions.