We are consulting on our proposed approach to the allocation, calculation and collection of PSR regulatory fees for 2016/2017.
This consultation includes information on our regulatory fees that relate to our functions and activities under the Financial Services (Banking Reform) Act 2013 (FSBRA), and the new EU Interchange Fee Regulation (IFR).
Why are we publishing this document?
We are looking for feedback on our proposed approach to the allocation, calculation and collection of PSR fees for 2016/17. This document forms part of our annual cycle of fees consultation for 2016/17.
What are the fees for 2016/17?
The PSR’s Annual Funding Requirement (AFR) for the year 2016/17 is approximately £15 million, which we are proposing to split across the PSR’s FSBRA and IFR functions as follows:
- £13.5 million for functions and activities in relation to FSBRA and concurrent competition powers
- £1.5 million for functions and activities in relation to the IFR
Who should read this document?
This consultation is relevant to participants in regulated payment systems under FSBRA, IFR regulated persons and PSPs which operate in the UK.
How are fees collected?
We are funded entirely by the participants in the payment systems we regulate.
The FCA is responsible for funding the PSR, and can make rules to raise the fees to fund us. The FCA and PSR work together:
- to develop a proposed allocation approach for the PSR’s AFR
- a proposed approach to the calculation and collection of the PSR fees for 2016/17
- to consult on this proposed approach
Following this consultation, the FCA will make the fees rules which implement the approach to our regulatory fees for 2016/17.
What do I need to know?
Fees need to be paid to fund our activities and functions under FSBRA and the IFR as follows:
We are proposing to follow the same approach as last year. Our FSBRA-related AFR will be allocated equally across Bacs, CHAPS, C&C/NICC, FPS, LINK, MasterCard and Visa. Fees will be collected on our behalf by the systems operators from their PSP members, acquirers and card issuers proportionally to their transaction volumes (or shareholdings in the case of NICC).
On 9 December 2015 we became the competent authority for monitoring and enforcing compliance with the IFR in the UK. We have also been given additional powers to collect fees for our functions and activities under the IFR.
We are proposing a separate, three-tier, approach to the allocation of our funding requirement across the card payment systems that operate in the UK and are subject to the IFR (American Express, Diners Club, JCB Europe, MasterCard, Union Pay International and Visa), as follows:
- equal allocation across the larger IFR card payment systems
- those with a more limited UK presence would pay a flat fee
- the systems with the smallest UK presence would pay nothing
As for FSBRA, the systems operators will collect the PSR fees on our behalf from their acquirers and card issuers proportionally to their transaction volumes.
What happens next?
We want stakeholders with an interest in our regulatory fees to let us know what they think by emailing us at: PSRfees@psr.org.uk
The deadline for comments and responses to our consultation is 5pm on Thursday 11 February 2016.
Once the consultation has closed, we will consider the responses received and we will publish our final approach to the allocation, calculation and collection of 2016/17 fees in spring 2016. At the same time we will consult on the level of fees that need to be paid, with the final decision and fees rules being published in the summer 2016.
The application of the Interchange Fee Regulation in the UK
We are consulting on draft guidance on how we will monitor and enforce compliance with the European Union’s (EU’s) new Interchange Fee Regulation (IFR), in the UK.
PSR regulatory fees 2015/16 (CP15/26)
This paper sets out our final approach to allocating and setting fee levels for each regulated payment system.
How the PSR is funded
The PSR annual budget and costs explained