Following EU Withdrawal, the Interchange Fee Regulation (IFR) is now retained EU law. It now applies in the UK as amended by the Interchange Fee (Amendment) (EU Exit) Regulations 2019.
We worked with HMT and other regulators to onshore relevant EU and domestic legislation, including the IFR, as part of our preparation for EU withdrawal. The IFR was onshored by Statutory Instrument (SI) on 13 February 2019 and came into force in UK law at the end of the implementation period.
We also onshored the Regulatory Technical Standards Regulation (RTS Regulation) adopted under Article 7 of the IFR which introduced specific requirements relating to the independence of payment card schemes and processing entities.
The purpose of this onshoring work was to ensure that the IFR and the RTS Regulation still operate effectively after the end of the implementation period.
Transactions which take place solely within the UK, where the point of sale (‘merchant’), acquirer and card issuer are all within the UK, are covered by the onshored IFR (‘UK IFR’) and subject to the interchange fee caps as before. However, consumer cross-border card payments between the UK and EU (or any other third country), where either the acquirer or issuer is based outside the UK’s jurisdiction, are no longer subject to the interchange fee caps established under either the UK IFR or EU IFR
Consumer cross-border card payments made in the EU with cards issued in third countries (for example, the USA or Australia), including the UK, are subject to interchange fee caps set out in the commitments made by Visa and Mastercard to the European Commission in 2019. These commitments cap card present transactions at 0.2% and 0.3% for debit cards and credit cards respectively, and card not present (I.e. online) transactions at 1.15% and 1.5% respectively. As these Commitments were made to the European Commission with regards to transactions at EU merchants, the PSR does not monitor or have any role with respect to them.