Mastercard has increased fees for merchants when UK cardholders make purchases from the EU.
A fivefold rise in charges has led to much concern that a spike in consumer prices on goods is imminent, having a widespread impact on sectors that place a heavy focus on tourism.
The banking giant cited the UK’s departure from the EU as the reason the rise had to be implemented, stating: “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.
“In practice, only EEA merchants making e-commerce sales to UK cardholders will see a change.”
The new rules, which may also lead to an abundance of paperwork for UK firms, will come into force in October allowing companies with a timeline to alter their trade and transactions in order to avoid potentially significant fees.
The rules will however also have wider implications on the growing e-commerce sector, with a substantial amount of Amazon transactions being made through the group’s EU footprint.
The EU has always placed a limit on the cap for consumers and merchants, in order to halt banks from charging excessively, however, given the UK’s departure from the Union these caps are no longer applicable.
Currently, the cap is at 0.3 per cent for credit cards and 0.2 per cent for debit cards, however, with the impending regulations this figure will rise to 1.5 per cent for credit card transactions and 1.15 per cent for debit cards.