On the 17 November 2015 HM Treasury confirmed the PSR as the competent authority and lead UK regulator for the IFR.

This consultation paper and the accompanying draft guidance explain how we will monitor compliance with caps on interchange fees and business rules that will be in forced from the 9th December 2015.

Update: On 24 March 2016 we published our final guidance. Read the final guidance.

Why are we publishing this document?

The IFR takes effect from 9 December 2015 and will bring major changes to the way card payment systems operate in Europe.  Most notably the IFR will introduce caps on the interchange fees on debit and credit card transactions where both the issuer and acquirer are located in the EU.

Interchange fees are fees paid between the bank of a merchant (such as a supermarket) and the bank of a card user (such as somebody doing a weekly shop) when a card payment is made.

We are seeking stakeholders’ views on our draft guidance.

Who should read this paper?

This consultation is relevant to payment card schemes and their participants (operators, payment service providers and infrastructure providers) as well as those who use these services.

What is our proposed approach?

We will be consulting in two phases to make the process more manageable for respondents. This consultation document is Phase 1 and it includes:

  • to whom the IFR applies
  • interchange fee caps and how we will consider who may be exempt
  • our approach to monitoring compliance with the IFR
  • our powers and procedures under the IFR
  • penalties under the IFR

Next year we will issue Phase 2, a separate consultation, which will focus on our approach to the remaining IFR provisions that has not been captured in this paper. These provisions will come into effect on 9 June 2016.

What are the next steps?

We would like to receive your feedback on our draft guidance and welcome responses by 5.00pm on Friday 29 January 2016. We will review and consider the feedback when we finalise our approach, next year around spring.

How to respond?

You can respond by sending your comments to our consultation question by emailing us at: cards@psr.org.uk.

Further information