LONDON (Reuters) – Britain’s payments regulator said on Friday it would consult on whether to introduce a cap on cross-border card fees charged when European consumers buy online from UK businesses, after concluding they had been increased to “unduly high levels”.

The Payments System Regulator (PSR) first published interim findings on the market – dominated by Mastercard and Visa – in December last year.

The watchdog has been reviewing how interchange fees applied on credit and debit cards issued in the European single market when buying online from UK businesses since Brexit have changed, when the bloc’s longstanding cap ceased to apply in Britain.

“Our findings confirm that, due to a lack of competition, Mastercard and Visa were able to raise cross-border interchange fees to an unduly high level, costing UK businesses hundreds of millions of pounds,” said David Geale, managing director at PSR.

The PSR confirmed its earlier finding that fee increases had cost businesses 150-200 million pounds ($189-252 million) extra per year.

The PSR said the review has focused on charges set by Mastercard and Visa, as they account for 99% of debit and credit card payments in the UK.

The regulator is consulting on a potential short-term, interim cap on fees, ahead of a potentially longer-lasting cap, with feedback invited until February 7 2025.

“We continue to dispute the  overall findings of the PSR and it will be important to ensure that any measures do not lead to uncertainty and unintended consequences,” a spokesperson for Visa said in a statement.

“Artificial controls on interchange do not reflect the commercial reality of today’s market and, if not set at the right level, can negatively impact the value people and businesses receive from card payment,” a spokesperson for Mastercard said.

($1 = 0.7924 pounds)

(Reporting by Iain Withers)