The IFR gives some discretion to national governments to grant a time-limited exemption from domestic interchange fee caps to certain three party card schemes until 9 December 2018. In the UK, the Government has exercised this discretion.
To qualify for the exemption, the value of an exemptible three party card scheme’s annual UK card-based payment transactions must not exceed 3% of the annual value of all card-based payment transactions made in the UK.
Each year, we are responsible for determining if exemptible three party card schemes qualify for an exemption from the domestic interchange fee caps. At present, American Express is the only card scheme operating in the UK that could qualify.
Today, we confirm that the value of American Express’s annual UK card-based payment transactions in 2017 exceeded 3% of the annual value of all card-based payment transactions made in the UK.
Therefore, in respect of the period 1 April 2018 to 9 December 2018, the American Express scheme is not exempt from the obligations under Chapter II of the IFR for UK domestic transactions except where it is considered to be a three party payment card scheme as defined in Article 2(18) IFR.
This is the last occasion on which we undertake this work as the time-limited exemption expires on 9 December 2018.
Our guidance sets out how we determine if an exemptible three party card scheme qualifies for an exemption from the domestic interchange fee caps.
We have previously determined that the American Express scheme is subject to the interchange fee caps on UK domestic transactions from 9 December 2015 to 31 March 2016, 1 April 2016 to 31 March 2017 and from 1 April 2017 to 31 March 2018.