Online shopping has become the “norm” for consumers today. With so many choices and the ongoing digitalisation of retail, entering a few credit card details and tapping “submit” from anywhere has become effortless and convenient. Beneath the undeniable allure of simplicity, though, the cost structures and regulatory framework surrounding credit card payments have also shifted significantly. This has left consumers and merchants alike wondering whether credit card payments are still the sensible choice for online transactions. Protection, associated fees, and the burgeoning array of emerging payment methods are now top of mind.
Real‑World Context
From travel and streaming service upgrades to box subscriptions, credit cards have been the go-to for online transactions due to their convenience, speed, and built-in protection. This is also seen in online gambling, with the vast majority of players being drawn to the familiar security net of card deposits, particularly in regulated environments that emphasise secure transactions and transparent dispute resolution processes. The same argument extends to gaming in general, as with ticketing sites offering immediate booking confirmation or eCommerce retailers refunding purchases directly to cards.
Even in light of new payment innovations, casinos with credit card deposit options are still in high demand among players who value security. These offshore sites are safe and reliable, offering near-instant deposits as well as fraud protection and little to no KYC requirements. This means players can get started quickly and anonymously.
Nevertheless, regulatory pressure for responsible gambling is shifting. Operators are increasingly promoting bank-based or e-wallet options due to reduced costs and compliance, including credit card bans in some markets. A trend that will likely accelerate the adoption of alternative payment solutions going forward.
Rising Fee Pressures
In late 2024, a UK Payments Systems Regulator (PSR) market review revealed that Visa and Mastercard collectively control approximately 95% of all UK card payments. Since 2021, these organisations have imposed exorbitant fees, costing British businesses a projected £170 million every year.
Following Brexit, cross-border card interchange fees have skyrocketed, with credit transactions surging from a capped rate of 0.3% to as high as 1.5%. To address this, the PSR is currently consulting on interim caps, likely around 0.3% for credit cards, with permanent measures anticipated in late 2025.
Regulator concerns regarding scheme transparency and processing fees are behind upcoming reforms, which may compel card networks to disclose their pricing methodologies and subject them to competition enforcement.
The Value of Consumer Protection
Credit cards remain a reliable form of payment, primarily due to protections not available elsewhere, such as the Consumer Credit Act, which safeguards purchases between £100 and £30,000. This means consumers can claim refunds from their card provider for defective goods or if a retailer becomes insolvent. Even debit card chargebacks offer far more security than many new payment methods.
On the other hand, “pay by bank” may potentially reduce merchant fees, but it lacks the same level of consumer protection, as it does not offer liability or chargeback guarantees. This places a greater risk on the consumer, particularly for pricier purchases.
Emerging Alternatives and Innovation
Both merchants and regulators are increasingly dissatisfied with legacy card schemes, leading to a spurred interest in open banking as a more cost-effective alternative. The UK government’s Future of Payments Review suggests that open banking could introduce digital payment methods that challenge Visa and Mastercard, transforming their cost structures.
Hybrid payment programs are gaining traction, with Visa A2A (now known as “Visa Smarter Pay by Bank” or “Visa A2A”) already live for bills and subscriptions, with e-commerce expansion to come later in 2025. It introduces Visa’s consumer protection features into bank transfers, providing benefits of near real-time settlement, refund dispute resolution processes, and improved data reconciliation. This essentially merges the speed of open banking with the security of card payments.
Practical Takeaways for Cardholders
In 2025, credit cards will continue to offer consumers some peace of mind, primarily fueled by their sound legal protections, long-established dispute resolution mechanisms, and the enduring convenience of their checkout processes. However, the financial ecosystem is not without its tensions.
Significant lobbying efforts by various stakeholders regarding practices such as unjust surcharging and ambiguous hidden processing charges are creating ripples. This pressure can incite merchants to subtly or overtly discourage the use of credit cards. Merchants might implement user experience modifications that subtly steer consumers towards alternative payment methods, or they may introduce explicit, legally sound payment charges that make credit card use less appealing.
While newer payment methods, such as “Pay by Bank,” may gain traction, credit cards will maintain an advantage for cautious consumers until such alternatives provide comparable consumer protection.
Conclusion
In 2025, credit cards will continue to be a smart and dependable online payment option, particularly for those who prioritise security, recoverability, and clear transaction records. That said, the balance is shifting… fast.
Consumers benefit from stringent rights, such as protection and chargeback mechanisms, that many new services often lack. At the same time, UK regulators are finally acting to rein in soaring merchant fees and demanding transparency from Visa and Mastercard. Open banking and A2A innovations may lower costs and shake up the status quo, but until those alternatives match card‑based protections, credit cards will remain a dependable choice for shoppers.
