Mastercard set to increase fees on EU purchases 

Mastercard will be increasing the fees it charges merchants when UK cardholders buy goods and services from the EU.

Transactions with airlines, hotels, car rentals and holiday firms based in the EU could all be affected.

Mastercard attributed the move to the UK’s decision to leave the EU.

It added that “in practice” UK consumers would not notice the move.

The change affects the “interchange” fees Mastercard sets on behalf of big banks, so that its customers can use their payment networks.

From October, 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 with hidden costs.

Mastercard said that since the end of the Brexit transition period, the cap no longer applied to many payments between the UK and European Economic Area (which also includes Iceland, Liechtenstein and Norway).

It said its new policy was in line with a deal it made with the EU on fees for purchases from outside the EEA.

“As a result of the UK leaving the EEA, Mastercard will adapt interchange rates on UK cards to the commitments it gave the European Commission in 2019 for non-EEA card transactions,” the company said.

“In practice, only EEA merchants making e-commerce sales to UK cardholders will see a change.”