Post-Brexit penalty reveals the power of the credit card duopoly

Post-Brexit penalty reveals the power of the credit card duopoly

Financial regulation would be different and better after Brexit, promised UK chancellor Rishi Sunak. Sam Woods, who heads the Prudential Regulation Authority, talked of being freed from the "shackles“ of Brussels' rules.

But UK policymakers, and most other supporters of post-Brexit deregulation, probably did not have in mind the quintupling of certain credit card fees when Britons buy goods from the EU.

That is now what is happening when Mastercard debit and credit cards are used “” as the Financial Times revealed last week. From October, merchant's so-called "interchange“ fees will jump from 0.3 per cent of the transaction value to 1.5 per cent when someone with a UK credit card buys something from continental Europe. Debit card fees will rise from 0.2 per cent to 1.15 per cent.

Visa has not said whether it would take the same step, merely promising that it would give six months' notice in the event of any change, though many in the industry expect it to ape its arch rival.

On the one hand, it is hard to blame the credit card companies. The fees were only as low as they have been because of an EU cap, imposed in 2015, which fell away with Brexit.

The "normalised“