LONDON, Dec 13 (Reuters) - Britain's payments regulator

said on Friday it would consult on whether to introduce a cap on

cross-border card fees charged when European consumers buy

online from UK businesses, after concluding they had been

increased to "unduly high levels".

The Payments System Regulator (PSR) first published interim

findings on the market - dominated by Mastercard ( MA ) and Visa

- in December last year.

The watchdog has been reviewing how interchange fees applied

on credit and debit cards issued in the European single market

when buying online from UK businesses since Brexit have changed,

when the bloc's longstanding cap ceased to apply in Britain.

"Our findings confirm that, due to a lack of competition,

Mastercard ( MA ) and Visa were able to raise cross-border interchange

fees to an unduly high level, costing UK businesses hundreds of

millions of pounds," said David Geale, managing director at PSR.

The PSR confirmed its earlier finding that fee increases had

cost businesses 150-200 million pounds ($189-252 million) extra

per year.

The PSR said the review has focused on charges set by

Mastercard ( MA ) and Visa, as they account for 99% of debit and credit

card payments in the UK.

The regulator is consulting on a potential short-term,

interim cap on fees, ahead of a potentially longer-lasting cap,

with feedback invited until February 7 2025.

"We continue to dispute the  overall findings of the PSR and

it will be important to ensure that any measures do not lead to

uncertainty and unintended consequences," a spokesperson for

Visa said in a statement.

"Artificial controls on interchange do not reflect the

commercial reality of today's market and, if not set at the

right level, can negatively impact the value people and

businesses receive from card payment," a spokesperson for

Mastercard ( MA ) said.

($1 = 0.7924 pounds)