Mastercard has lost an appeal to impose charges on UK retailers for cross-border credit and debit transactions.

The EU Court of Justice upheld the European Commission’s 2007 declaration that the charges for processing card payments from customers from other countries were “anti-competitive and unlawful”.

The decision was welcomed by the British Retail Consortium, who argued that these ‘interchange fees’ were much higher than the actual costs that card firms incur in processing transactions and so are an unjustifiable tax on retailers and consumers.

In the UK, the Office of Fair trading (OFT) is currently investigating fees levied on domestic card transactions.

BRC director general Stephen Robertson called on the OFT to take similar action. “I applaud the European Court for holding firm on its decision to end this unjustifiable tax on customers,” he said. “This is a historic and highly significant decision on card charges for transactions between European nations but what comes next is crucial. And that should be fairer costs for customers and retailers whenever they pay by card.

“People deserve the same treatment on card charges when buying within the UK,” added Robertson. “Hundreds of millions of pounds are at stake. The OFT should follow this landmark European ruling with rapid action here.”