On March 24, 2016, the PSR published its final Guidance on the application of the EU Interchange Fee Regulation. The IFR, which is directly applicable across the EU, applies to payment card schemes, issuing and acquiring payment service providers, processing entities, other technical service providers and, in certain circumstances, merchants. The IFR applies to the following payment card schemes: MasterCard, Visa Europe, American Express, Diners Club International, JCB International and Union Pay International. The PSR’s Guidance covers: (i) the classification of schemes for IFR purposes; (ii) interchange fee caps and the possible exemption from those caps for some three-party schemes; (iii) the PSR’s powers and procedures, including penalties for non-compliance; and (iv) the business rules. The PSR intends to consult later this year on guidance to cover the remaining provisions of the IFR that come into force on June 9, 2016.

Separately, the PSR announced its final determination on whether American Express qualifies for an exemption from the interchange fee caps introduced by the IFR which impose caps on interchange fees on debit and credit card transactions where the issuer and acquirer are both located in the EEA. Three-party card schemes may qualify for an exemption from the IFR interchange fee caps on UK domestic card-based payment transactions depending on their market share. The PSR’s interim decision, published in December 2015, was that American Express was not exempt. The PSR has confirmed that American Express is not exempt and that it must comply with the interchange fee caps from April 1, 2016, to March 31, 2017.

The Guidance is available at: https://www.psr.org.uk/sites/default/files/media/PDF/IFR-final-guidance-phase-1_0.pdf and the announcement is available at: https://www.psr.org.uk/psr-publications/news-announcements/finaldetermination-card-schemes-subject-to-cap-March-2016.