Credit card is seen in front of displayed Visa logo in this illustration taken July 15, 2021.
Credit card is seen in front of displayed Visa logo in this illustration taken July 15, 2021. Reuters / Dado Ruvic

It could be years before card fees from global payments duo Mastercard and Visa can be capped again to cut costs for retailers and consumers, Britain's payments regulator told lawmakers on Wednesday.

Chris Hemsley, managing director of the Payment Systems Regulator, came under heavy pressure from parliament's Treasury Select Committee to tackle card fees faster.

So-called interchange fees levied by Mastercard and Visa on retailers for consumer purchases from the European Union rose in 2021 after an EU cap ceased to apply in Britain following its departure from the bloc.

Five months ago the regulator told the committee that despite requests for information, the hike could not be explained by changes in the volume, value or mix or transactions.

"At the moment we don't have a good explanation as to why costs have changed," Hemsley told lawmakers on Wednesday.

Committee chair Mel Stride and other lawmakers urged Hemsley to move faster and "whack the cap back on".

"I am frustrated about this as well. There isn't a very quick fix to this issue," Hemsley said, adding that such investigations can take up to four years to fully conclude.

"It will take some time," he said.

Visa and Mastercard account for about 90% of retail card payments, a sign the market is not working properly, Hemsley said.

But the payments regulator has to complete its investigation carefully to ensure "robust" conclusions in the face of "enormous, well-resourced multi-national organisations" like Visa and Mastercard, PSR outgoing chair Charles Randell said.

No other regulator globally was confronting the two card companies in the same way, he said.

Mastercard and Visa had no immediate comment.

Hemsley, who dismissed retailer accusations of being "bamboozled" by Visa and Mastercard, said the regulator would next month publish more details on its investigation.

The EU has also long sought to inject more competition in a market dominated by the U.S. duo but with little success so far.