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The IFR and Brexit

The UK left the EU on 31 January 2020 and entered an implementation period. 

During the implementation period, EU law will continue to apply in the UK. This means that the IFR continues to apply until 31 December 2020. After this date, if an agreement is struck, the application of EU laws in the UK will depend on the terms of this agreement. 

Find out more about our preparations for the UK’s withdrawal from the EU on our Brexit page

Our work

We worked with HMT and other regulators to onshore relevant EU and domestic legislation in the event of a no deal scenario, including the Interchange Fee Regulation (‘IFR’). The IFR was onshored by Statutory Instrument (SI) on 13 February 2019 and will come into force in UK law on at the end of the implementation period, if the UK leaves the EU without an agreement. 

We also onshored the Regulatory Technical Standards Regulation (RTS Regulation) adopted under Article 7 of the IFR which introduced specific requirements relating to the independence of payment card schemes and processing entities.

The purpose of this onshoring work was to ensure that the IFR and the RTS Regulation still operate effectively after the implementation period ends, if the UK leaves the EU without an agreement.

Transactions which take place solely within the UK (where both the acquirer and the card issuer are located in the UK) would be covered by the onshored IFR and subject to the interchange fee caps as before. However, cross-border card payments between the UK and the EU, where the acquirer or card issuer are based in different jurisdictions, would no longer be subject to the caps established under either EU IFR or onshored IFR. 

Next steps

We will continue working closely with HMT and other regulators throughout the implementation period to identify and manage any risks Brexit may pose to the UK payments sector, in particular to the regulation of interchange fees on card payment transactions.

For information on steps payment services providers operating in the UK should take in the lead up to Brexit, please visit the FCA Brexit page.