The Interchange Fee Regulation (the IFR) introduces caps on the interchange fees on debit and credit card transactions where both the issuer and acquirer are located in the EEA. It also sets out certain business rule provisions that will require affected parties to amend their business practices (unless their current practice already complies with the provisions).

Under the IFR each Member State must appoint one or more competent authorities to enforce the Regulation. HM Treasury has decided that the Payment Systems Regulator (PSR) will be the main competent authority in the UK.

The PSR has now published Consultation Paper 15/3: The application of the Interchange Fee Regulation in the UK: Phase 1 (CP15/3).

The PSR will consult on the IFR in 2 phases to make the process more manageable for respondents and allow it to describe its approach to those aspects of the Regulation that come into force on 9 December 2015 as soon as possible. CP15/3 is the PSR’s phase 1 consultation and together with the accompanying draft guidance the PSR explains how it will monitor compliance with caps on interchange fees or equivalent issuer compensation (articles 3, 4 and 5 of the IFR), and business rules provisions already or soon to be in force (articles 6, 11 and 12 of the IFR).

The deadline for comments on CP15/3 is 29 January 2016.

The PSR will conduct phase 2 of its consultation in due course. This will cover the PSR’s approach to the remaining provisions of the IFR that come into effect on 9 June 2016.

View CP15/3 – The application of the Interchange Fee Regulation in the UK: Phase 1, 2 December 2015