Last week, HM Treasury published its response to the government’s consultation document, The Interchange Fee Regulation [IFR]: a Consultation, setting out its final approach to implementing the IFR for card-based payment transactions.

Making sure that the EU has a competitive financial services industry, that works in the interests of consumers and supports the wider economy is high up on the UK’s reform agenda, and tackling unfair card fees is a significant element of this. The key objective of the IFR is to introduce an EU-wide cap on the charges paid by a business when a customer pays for something using a card; these charges are currently estimated to total around £1 billion per annum.  In light of this, the response confirms that from 9 December 2015 the fees banks can charge will be capped at 0.3% for credit card transactions and an average of 0.2% for domestic debit card transactions which will save merchants in the UK around £480 million each year. The response also sets out the government's approach to other national discretions under the IFR, including appointing the Payment Systems Regulator (PSR) as the lead enforcer for the IFR.