Guidance on the PSR’s approach to monitoring and enforcing compliance with the Interchange Fee Regulation (September 2021)

This is the 2021 revised guidance on the Interchange Fee Regulation (IFR). It replaces the earlier version of the guidance that we published in 2020 (previously named Guidance on the PSR’s approach as a competent authority for the EU Interchange Fee Regulation). The revised guidance reflects changes arising from the UK’s withdrawal from the European Union and other changes to the regulatory framework.

In the UK, the PSR is the main authority for monitoring and enforcing the IFR. We monitor compliance with all provisions of the IFR, including the interchange fee caps and business rules.

What is the IFR?

The UK IFR caps the interchange costs passed on to merchants for processing domestic card payments, ensuring more certainty around domestic interchange fees.

We published our original guidance in 2016. We updated it in 2020, to bring it in line with our revised Powers and Procedures Guidance. Following the UK’s withdrawal from the EU, the IFR is now retained EU law, which applies in the UK as amended by the Interchange Fee (Amendment) (EU Exit) Regulations 2019.

Consumer cross-border card payments between the UK and EU, where either the acquirer, issuer, or point of sale is based outside the UK, are no longer subject to the interchange fee caps established under either the UK IFR or the EU IFR.

What this document contains

The UK IFR makes provisions for how card schemes, issuers and acquirers must operate in the UK. Our revised guidance reflects the principal differences between the EU IFR and the UK IFR, including the different scope of the UK IFR, and the amendments to the Regulatory Technical Standards (RTS) Regulation.

This guidance also reflects other changes since we first published it in 2016, which include the removal of Chapter 4 in its entirety, and removing references to weighted average interchange fees, as these provisions have now expired.

We consulted on proposed changes to the guidance in April 2021. Points raised in consultation responses resulted in us making minor additional changes to those we consulted on. Other than these additions, we have not made any changes to the guidance since the version we consulted on.

Who should read this guidance?

We are committed to giving regulated firms clear and helpful guidance.

This guidance is likely to be of interest to card scheme operators subject to the UK IFR, parties contracting with card schemes and/or processing entities (for example, issuers and acquirers), third-party card payment processors and merchants that accept card payments.This guidance is likely to be of interest to card scheme operators subject to the UK IFR, parties contracting with card schemes and/or processing entities (for example, issuers and acquirers), third-party card payment processors, and merchants that accept card payments.

What next?

We are monitoring compliance with the UK IFR and will take action where appropriate.

If you have a complaint about a breach of the UK IFR, you may submit it to us. We may then decide to open an investigation. Visit our complaints page for more information.