This paper sets out our final approach to allocating and setting fee levels for each regulated payment system. It also includes further consultation on the way we will calculate and collect fees from the direct members of those systems.
Who should read this document?
This document is relevant to all participants in the UK payment systems industry, in particular operators and payment service providers which are direct members of regulated payment systems.
Why we are publishing this document
This document forms part of the annual cycle of fees consultation and it covers two things:
- how we have decided to allocate fees between regulated payment systems and set 2015/16 fee levels relating to each regulated payment system, and
- how we propose to collect fees from the direct members of those systems and how their 2015/16 individual PSR fees will be calculated.
In our 2015/16 Annual Plan we confirmed the amount, the annual funding requirement, £28.1 million, we would need to raise from participants in regulated payment systems, but we still needed to confirm our approach to fee calculation and collection (that is, who pays what). Chapter 3 of this paper confirms how we will allocate fees to regulated payment systems, and sets the 2015/16 fee levels for them.
Following feedback from stakeholders on the regulatory burden implications of our original fee collection method, we are proposing a new approach to fee calculation and collection.
We are therefore consulting on how fees will be calculated for individual direct members of regulated payment systems, and how we will collect fees (that is, how the fees reach us). This is set out in chapter 4.
What happens next?
The consultation is open until 17 September 2015 and we would encourage as many stakeholders with an interest in our fees to respond.
Once the consultation has closed, we will consider the responses received before we set out our final approach to fee collection and calculation.
We are aiming to confirm our decision on fee calculation and collection in a policy statement in the second half of October 2015. Invoices will be issued by payment systems operators by the first week of November 2015, and fees will need to be paid by the beginning of December 2015.
How we collect our annual funding requirement
We are funded by the industry we regulate, specifically the participants in the eight regulated payment systems that have been designated by HM Treasury for regulation by the PSR. We work hard to try and keep the cost of regulation as low as possible.
Once we have decided how much the annual funding requirement should be, the Financial Conduct Authority (FCA) raises fees on our behalf.
This is the similar to the way the FCA raises fees for the Money Advice Service, the Financial Ombudsman Service and the Financial Services Compensation Scheme.
In November 2014, as part of a wider FCA consultation on fees (FCA CP 14/26), we published our proposed funding requirement for 2015/16. We set out:
- our annual funding requirement of £28.1 million,
- the set-up costs of the PSR, and
- our proposals as to how we would be looking to recover and allocate fees on an ongoing basis from regulated payment systems.
In March 2015, as part of FCA CP 15/14, we gave feedback on responses to the proposals we set out in CP 14/26 and decided that fees should be allocated equally across regulated payment systems (treating Cheque & Credit and Northern Ireland Cheque Clearing as a single UK system for the purpose of collecting fees). We also decided how PSR set-up costs would be recovered and certain fees rules. Finally, we consulted on the 2015/16 fee levels relating to each of the regulated payment systems.
Then, in May 2015, we published a supplementary paper to FCA CP 15/14 providing additional information in response to questions from stakeholders.