UK Payment Systems Regulator Publishes Final Guidance on the European Interchange Fee Regulation

The UK Payment Systems Regulator published the final Guidance on its approach to monitoring compliance with the EU Interchange Fee Regulation. The final Guidance consolidates the previous final Guidance published in March 2016 on enforcing compliance of the provisions of the Regulation that came into force on December 9, 2015, with the latest Guidance relating to provisions that subsequently came into force on June 9, 2016. The PSR has also published a Policy Statement which summarizes the main responses to the PSR's latest draft Guidance. 

The Interchange Fee Regulation imposes caps on interchange fees on consumer debit and credit card transactions where the issuer and acquirer are both located in the EEA. The final Guidance applies to payment card schemes, issuing and acquiring payment service providers, processing entities, other technical service providers and merchants. The final Guidance focuses on provisions capping interchange fees or equivalent issuer compensation and the business rules provisions, defines the two broad types of card schemes which are subject to the Regulation (four-party schemes and certain three-party schemes) and outlines the interchange fee caps that apply to domestic and cross-border debit and credit card transactions. Interchange fees include both direct and indirect payments from acquirers to issuers. Furthermore, the final Guidance expands on the temporary exemption from domestic interchange fee caps applicable to certain three-party schemes. The final Guidelines also explain the application of the business rules provided by the Regulation on areas such as licensing, separation of payment card schemes and processing entities, co badging and choice of payment brand or payment application, unblending and the “Honour All Cards” rule. The final Guidance also outlines the PSRs enforcement powers and procedures under the Regulation and penalties for non-compliance. 

View the final Guidance.

View the Policy Statement.