Please note: Response to this survey is required by 23:59 on Sunday 16th August 2026
Background

The PSR is currently conducting a market review of consumer cross-border interchange fees between the UK and the European Economic Area (EEA). We concluded in December 2024 that interchange fees on UK-EEA consumer card-not-present (‘CNP’) outbound transactions had increased to unduly high levels and that a cap on these interchange fees would be the most appropriate remedy available to us. Since then, we developed a methodology to assess the appropriate level of these fees and consulted stakeholders on this approach in October 2025.

The methodology includes the comparison of the costs to a merchant when undertaking a payment transaction using cards relative to a payment with an alternative payment method. For the purpose of our research, we have defined these as follows:
  • Consumer cards (debit and credit) offered by Mastercard and Visa for online cross-border payments.
  • Alternative payment methods offered in the form of online banking or account-to-account (A2A) transfers (such as those provided by Bancontact, Blik, Przelewy24, Trustly, Wero …).
Introduction to back-office costs

The upfront costs of accepting payments consist of the direct fees and commissions that acquirers charge. We are currently collecting this pricing data from acquirers, who are responsible for invoicing merchants.

To assess all relevant costs, we also want to include the administrative, operational, and technical costs borne by merchants when processing payments with different payment methods. We refer to these as ‘back-office’ costs, since they relate directly to internal time spent by a merchant to process payments.

Our preliminary research has identified three main ‘back-office’ costs:
  • Processing of refunds
  • Processing of disputes (chargebacks)
  • Payment reconciliation services
A description of these three categories is provided in the box below:

For a UK-based merchant handling online transactions from customers within the EEA, we have identified three core categories of back-office costs:

1. Refunds. These are refunds you have chosen to make, for example because of returns or cancellations. We are interested in the staff time required to process a typical refund for each relevant payment method, including the time spent on customer service, checking the return, and updating your records. This does not include chargebacks.

2. Disputed transactions. When a consumer initiates a chargeback, merchants may incur administrative costs in reviewing the claim, gathering relevant evidence and responding within applicable timeframes. We are interested in understanding the staff time and resources involved in managing these processes. We recognise that the process may differ across payment methods.

3. Payment reconciliation. Data from various payment providers may need to be combined into a standard format for accounting, auditing and monitoring purposes. This process can be handled using direct staff time (to manually download, clean, and map distinct reporting file formats) or via specialised reconciliation software (which allows multi-currency matching systems).
Materiality of costs

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1. Based on your experience, are back-office costs material when compared with the upfront transaction fees that you pay to your acquirer (such as the Merchant Service Charge)?

Do back-office costs vary between consumer cards and alternative payment methods? If so, please explain how.

In terms of their materiality, are there significant differences across the three identified categories (refunds, disputes, and reconciliation)?

Capability to estimate costs

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2. Are you able to estimate these back-office costs (refunds, disputes, payments reconciliation)?

If so, please explain how these costs are recorded or estimated (for example, through tracked staff time or other internal records).

Please indicate whether any of these activities are carried out by your acquirer or by a third-party provider on your behalf.

Impact of customer location and merchants’ characteristics

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3. Based on your experience, do the costs or effort involved in processing refunds, disputes or reconciliation differ significantly between domestic UK transactions and cross-border EEA transactions? If relevant, please indicate whether any differences appear to vary by transaction value.

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4. Please enter your company name

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5. Would you be willing to participate in a brief follow-up questionnaire (approximately 10–15 minutes) seeking cost data or estimates relating to your back-office payment processing activities? If so, please enter your details below.

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