On 20 August 2015, the Payment Systems Regulator (PSR) published a consultation paper(CP15/26) on its regulatory fees for 2015/16. The PSR has decided to allocate PSR fees between payment systems based on equal allocation across regulated pan-UK payment systems (with the two regional cheque systems, C&C and NICC, counted as a single system for fee allocation purposes).
The PSR is consulting on calculating and collecting fees from participants in each regulated payment system. The PSR’s preferred approach is ‘indirect billing’, where direct members of regulated payment systems will be liable for PSR fees, which will be collected on its behalf by payment system operators. This approach is intended to minimise the regulatory burden on the industry.
The PSR has suggested a different approach than the original system it proposed, where PSR fees were to be levied on operators (the ‘billing operators’ approach) who would then pass on fees to their direct members. The PSR decided that its original approach would increase the cost of regulation significantly as operators invoicing their direct members could be deemed a taxable supply and subject to VAT and the operators’ operational costs would increase. This would in turn increase the regulatory reserves which operators supervised by the Bank of England are required to hold.