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Statement on card schemes subject to domestic interchange fee caps in the UK in 2017/18

Published 23 03 2017

The Interchange Fee Regulation (IFR) has brought a number of changes to the way UK card schemes operate, most notably by introducing a cap on interchange fees applicable to certain consumer card transactions.

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. In the UK, the Government has decided to exercise this discretion.

To qualify for the exemption, the value of an exemptible three-party card scheme’s annual UK card-based payment transactions must be less than 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 2016 was above 3% of the annual value of all card-based payment transactions made in the UK.

Therefore, American Express and the payment service providers participating in its scheme will be subject to the interchange fee caps on UK domestic transactions from 1 April 2017 to 31 March 2018.

The interchange fee caps do not apply to transactions where American Express is both the card-issuer and the acquirer.

More information

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 American Express and the payment service providers participating in its scheme were subject to the interchange fee caps on UK domestic transactions from 9 December 2016 to 31 March 2016 and from 1 April 2016 to 31 March 2017.