While this price increase is 'opportunism' on MasterCard's part, I've seen people argue this isn't a consequence of Brexit, even though ultimately it is. British consumers are no longer protected by the rather "feisty" pro-consumer EU courts and are now at the mercy of the rather less consumer friendly UK courts, so companies like MasterCard will be tempted to "have a go."
One possible consequence of this, especially if Visa decides to join in, is that some companies that are based in the EU for payments (such as Amazon) will open up UK subsidiaries which may actually have a benefit for the UK. Or they might just put their prices up a bit. We'll see..
I have also added this to http://brexitreality.org/ - a spreadsheet of post-Brexit "how it's going" stories which you might find useful or wish to contribute to.
For example, in the UK Stripe charges one fee for European cards and another fee for non-European cards. I suppose this reflects the underlying costs. Because of this move by Mastercard I can see Stripe and others change this soonish with the lower fee applying only to UK cards (for customers based in the UK). And then we'll also have to see if the government keeps the cap for domestic transactions or decide to "cut red tape" and remove all restrictions.
I was shocked to hear that the UK government hasn't even got a department / individual with responsibility for monitoring and managing the EU trading relationship - not even the so called 'Department for International Trade'.
Leaving the EEA, the interchange paid to debit and credit card* issuers is indeed not capped to respectively 0.2 and 0.3% anymore. Banks can decide to charge more, but that is not different from say, purchases with Swiss or US credit cards that happen in the EU. Merchants and payment processors have to deal with that. Whether they can pass on the fee to specific consumers, I believe that depends on countries and competition laws. The issue here is that the EU prohibits card payment surcharges, which makes MC and VISA very happy.
But back to the initial topic, what's MasterCard's real involvement in pushing for interchange increase? Their own fee isn't concerned by this cap anyway. And from what I understand, it's very small compared to the part going to payment processors. Why would they initiate the move? I'm sure banks are very well aware of regulations going away and opportunities to charge more fees.
* Only 4-party schemes, non-business/corporate cards.
Those EU businesses that continue to sell to the UK will presumably already be working out an uplift to UK customer prices anyway - being denominated in a different currency makes this easy enough to do (it's impossible to identify consumer surcharges if you just list the prices in a different currency).
They are regulated, they're just allowed to charge more for EEA to non-EEA than they are EEA to EEA.
Since the UK is now isolated (and has spent its goodwill in the EU), MasterCard may reasonably believe they have power enough to do this.
Will the UK government regulate this? A government which is scarcely managing its current responsibilities.
> to do this.
The UK is still a large economy and there are quite a few other big players in the transactions handlers market. Given how several large companies are looking to setup micro-transactions with zero-cost transaction overheads, they might be shooting themselves in the foot.
The reason the UK should fight this is that they obviously currently have a lot of outgoings and very little income (like every Country during COVID). They will already have to raise taxes - if MasterCard are also raising their own form of tax this will even more greatly increase living costs.
> A government which is scarcely managing its current
> responsibilities.
I don't want to get into politics on HN.
Your original suggestion of regulation is politics. It's a political decision. When you say "the UK should fight this", you mean: "UK politicians should actively decide to act".
MasterCard making this move forces the UK government to show their hand - and it's not that MasterCard has made this decision without that in mind. It indicates that MasterCard thinks* there's a good chance UK government won't do anything.
(*or knows - they spend plenty on lobbying and will have spoken directly to decision-makers)
Also it's not as if there aren't alternative payment processors.