We are consulting on our proposed approach to the allocation, calculation and collection of PSR regulatory fees for 2017/2018.
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 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 2017/18 and our proposed changes to the fees rules.
Fee payers should note that we do not intend to consult each year in future, unless we are proposing material changes to our approach.
What are the fees for 2017/18?
The PSR will release figures for 2017/18 in early 2017.
We expect the PSR’s Annual Funding Requirement (AFR) for 2017/18 to be the same as, or lower than, it has been in the previous two years while the PSR has been setting up.
What changes are we proposing?
The changes we are proposing are as follows:
- Continue with our previous approach of publishing total transaction volumes (as decided in the 2016/17 consultation cycle), and to extend this to IFR transaction volumes for those systems where the operator does not act as a PSP itself (currently Visa and MasterCard).
- Require PSPs to provide operators with enough information to be able to assess, or estimate, relevant transaction volumes more accurately.
- PSR fees will be rounded up to two decimal figures.
- Where an operator is required to pay the fee itself, it must do so by 15 September.
We are not proposing to change our methodology on the way we handle any underspend.
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 propose to continue to adopt the ‘indirect billing’ method for our 2017/18 FSBRA and IFR fees, and future years.
This means that operators act as our collection agents and issue invoices in accordance with our instructions to specific categories of participants in payment systems.
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, Cheque and Credit/Northern Ireland Cheque Clearing, Faster Payments Scheme, LINK, MasterCard and Visa Europe. 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 are proposing to continue using the 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. In some systems the operators themselves pay the PSR fees.
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 16 January 2017.
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 2017/18 fees in spring 2017.
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 2017.