PSR sets out guidance on card payment regulation
Nixon: new regulations will reduce barriers for new competitors
The UK’s Payment Systems Regulator has published draft guidance on its plans for regulating new European payment card legislations that comes into force next week.
The Interchange Fee Regulation takes effect from 9 December, capping the interchange fees paid between merchant and card users’ banks when a payment is made. The European Commission’s intention with the cap is to redistribute the revenue from card issuing banks to merchants and on to consumers.
“It’s the interchange fee caps that have captured the public’s attention, but the IFR is more than that,” said Hannah Nixon, managing director of the PSR. “The intention of the IFR, as well as providing savings to consumers by reducing fees, is to boost transparency and remove barriers so others can enter the market and compete. These are goals that tally closely with those of the PSR and our wider agenda for UK payment systems.”
The draft guidance consultation includes:
- who the IFR applies to
- interchange fee caps and who may be exempt
- the PSR approach to monitoring compliance with the IFR
- the PSR’s powers and procedures under the IFR
- penalties under the IFR
Fee caps for the UK have been set by HM Treasury : in the UK there will be a cap of 0.3% for credit card transactions. For UK debit card transactions HM Treasury has chosen a weighted average of 0.2%, meaning the cap will be 0.2% of the average value of all UK debit card transactions from the previous year.
Consultation on the guidance closes on Friday 29 January 2016.
