Revolut and Visa file legal challenges over PSR's plan to cap fees

Card interchange fees are anti-competitive by incentivising high costs, inhibit innovation by providing little incentive for issuers to innovate with new payment methods and harm end-users who over-pay for goods and services and without their knowledge.

Although I am the last person to encourage regulation, given these points, the PSR is perfectly within its right to cap interchange fees, epecially since its objectives are to enable competition, innovation and end-user benefits.

The issue with interchange is the payers who ultimately pay it, consumers, have no choice in the matter and no knowledge of it. Interchange is set by card networks, disbursed to card issuers (who naturally choose the card network with the highest interchange), paid by acquirers who have no choice but to pay it, who collect it from merchants (the same, regardless of which acquirer they choose) who include it in the price of their goods and services paid by consumers.

Instead of caps, an alternative remedy would be to require merchants to separate the acquiring fee they pay on each sale from the sales price, charge it separately and display it on POS receipts and online checkouts. 

Thus, consumers would see the cost of the payment method they use and pay for it. As well as being fairer, through eliminating the subsidy of consumers with high cost credit and charge cards (gold, platinum etc) by those using low cost debit cards, this would encourage competition between different types of card and between different payment methods. In turn, this would lead to innovation with improved and new payment methods, benefiting consumers and society as a whole.