MR22/2.8 Consultation on methodology for developing a price cap remedy

Why are we consulting?

In the final report on our market review of UK-EEA cross-border interchange fees (IFs) between the UK and the European Economic Area (EEA), we concluded that IFs on UK-EEA card-not-present (CNP) outbound transactions had increased to unduly high levels. We found that these increases had negatively affected merchants and, to the extent of pass-through, their customers.

We concluded that the only effective remedy to address the detriment would be a price cap on the multilateral IFs (MIFs) for UK-EEA CNP transactions, that is, payments to UK merchants generated with an EEA-issued card (also known as ‘outbound’ IFs).

We said we would consult on the methodology for assessing an appropriate cap for outbound MIFs and that the outcome of that consultation would inform our next steps. We are now seeking views from stakeholders, via this consultation, on our proposed methodology for taking this work forward.

What is in the document?

The consultation document sets out our views on the methodology we propose to adopt in identifying an appropriate level of multilateral interchange fees in the UK-EEA CNP outbound corridor.

To help stakeholders to understand how this consultation fits into our ongoing work on the market review, we are publishing a factsheet alongside the consultation document. 

Who should read this document?

This document is relevant to the relevant to four-party card scheme operators, card issuers, card acquirers and merchants, as well as industry groups and trade bodies representing them. Other stakeholders that may be interested include: other scheme operators, EEA-based card issuers and firms based in Gibraltar, Jersey, Guernsey and the Isle of Man.