UK consumers will lose another layer of protection after Brexit when dealing with EEA-based suppliers, as the government will no longer cap interchange fees where either the merchant's acquirer or the payment card issuer is based outside the UK. This follows the erosion of other consumer protection measures for UK consumers buying from suppliers in the remaining EEA countries.
The proposed changes to the UK Interchange Fee Regulations for Brexit purposes would take effect on 30 March or end December 2020 (depending on whether there is a Withdrawal Agreement and related transition period). Among other things, the proposed Regulations:
- Limit the scope of the Regs from the EEA to the UK to transactions that take place only within the UK (both the acquirer and the card issuer are located in the UK), so cross-border card payments between the UK and the EEA will no longer be within scope of either the UK or EU interchange fee regs (i.e. payments made within the UK will continue to have caps on interchange fees, while payments where either the acquirer or the card issuer is based outside the UK (including in the EEA) will no longer be subject to the caps); and
- Allow for regulations setting lower caps on UK debit and credit card transactions, and a maximum cap for UK debit card transactions.
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