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Card payment systems

We are gathering evidence and would like input from industry

Our work on payment cards currently focuses on setting out our approach to monitoring and enforcing the Interchange Fee Regulation in the UK and keeping developments in the market under review.

What are payment cards and card payment systems?

A payment card is a card that can be used to withdraw money or pay for goods and service, for example a debit card, credit card, or prepaid card (a card loaded with funds).

Card payment systems enable individuals and organisations to make payments by card by providing a network that supports which joins up:

  • cardholders who use the cards as a way to make payments
  • issuers which make payment cards available to cardholders
  • merchants which are the retailers or service providers that accept card payments from cardholders
  • acquirers which process card payments on behalf of merchants

Card payment systems that currently operate in the UK are American Express, Diners Club International, JCB International, MasterCard, UnionPay International and Visa.

Our ongoing programme of work

We have noted that concerns around interbank payment systems (such as indirect access, transparency, governance and how service-users are represented in decision making) may also be relevant to card payment systems.

Based on the evidence we gathered, we do not believe that introducing new directions on card schemes at this stage would improve access and innovation. As part of our ongoing programme of work on cards, we will continue to consider these issues.

New legislation from Europe, most notably the new Interchange Fee Regulation (IFR), is bringing major changes to the way UK card payment systems operate.

Last year we were appointed by HM Treasury as the competent authority and lead regulator of the IFR in the UK. In March 2016 we published our final guidance for the parts of the IFR that came into force on 9 December 2015.

This guidance clarifies how the IFR will be applied, monitored and enforced in the UK. Specifically it sets out how we will monitor compliance with caps on interchange fees and on certain business rules. Read the final guidance.

We will be consulting on Phase 2 over the summer, focusing on the remaining parts of the IFR that have not been captured.

Questions and issues

We have asked stakeholders to respond to consultation on Phase 2 our IFR guidance. This contains background to the application of the IFR in the UK, draft guidance on the IFR provisions that will be in force from 9 June 2016 and the question we want you to respond to.

What happens next?

We will carefully assess all responses to our consultation and will publish final guidance later this year.