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Pass-through disclosure in the market review into card-acquiring services

Published 14 09 2020

We’ll shortly be publishing the interim report of our market review into card-acquiring services and launching a consultation process which will last for 12 weeks. 

Today, we’re setting out our plans to disclose material underlying our pass-through analysis through a ‘confidentiality ring’, to help in responding to the consultation. 

Access to the confidentiality ring will be granted to a limited number of approved external economic and/or legal advisers of certain parties with an interest in the consultation. These external advisers and their employer firms will be required to sign undertakings before they will be granted access to the confidentiality ring. 

We invite interested parties to submit expressions of interest for their external legal and/or economic advisers to access the confidentiality ring. We also invite parties expressing an interest to submit any comments they may have on the PSR’s proposed approach to disclosing the material, including the draft undertakings

The notice on this page provides full details of our disclosure exercise.

How to apply

Please email cards@psr.org.uk  with the subject heading including both the words “Pass-through disclosure – expression of interest” as well as the name of your organisation by 5pm on 25 September.
In your email, you will have to provide:

  • an explanation of the interest you have in the consultation (i.e. why you think the interim report   and the consultation affect you)
  • the reasons why you are requesting access to the confidentiality ring;
  • and details of your external legal and/or economic advisers (i.e. name, job title and employer) seeking access to the confidentiality ring.

Interested parties should include any comments they may have on our proposed approach to disclosing the material, including the attached draft undertakings. Comments should be supported with an appropriate explanation so that we are in a position properly to consider the merits of the comments received.

What is the pass-through analysis?

The pass-through analysis is a key way in which we have examined how the level of fees that merchants pay has responded to changes in interchange fees  and scheme fees, one of the things we said we’d do in our Terms of Reference. This is done by running econometric analysis on data provided by card acquirers.

What exactly is being disclosed?

We are disclosing monthly level sample data provided by five acquirers covering the period 2014 to 2018, as well as the code we used to run the analysis. The data is in .csv (comma separated values) format, while the code is in Stata’s .do file format.  We had originally intended to use R to do the analysis, but instead we used Stata, a software package commonly used in the social sciences.

How long do parties have to apply?

Any expressions of interest together with any comments interested parties have on the attached draft undertakings must be submitted to us at cards@psr.org.uk by 5pm on 25 September. 

We will consider the comments and each expression of interest received within the above deadline, and the reasons given for access to be granted, before deciding, at our discretion, whether to grant access to the confidentiality ring and whether any amendment is to be made to the attached draft undertakings.

How will access be given to the material?

Advisers to interested parties will be able to download  the material from a secure system (the HighQ system).

How long will access last? 

Advisers will be granted access to the material for at least 8 weeks. 

Are their plans to disclose anything else?

We currently do not plan to disclose any other material.