On 27 July, HM Treasury published a consultation on the application of the Interchange Fee Regulation in the UK, asking for feedback on their proposals on credit and debit card caps, a time-limited exemption from the rules for three-party schemes, and the regulatory structure. The EMA’s response to each question is below:
- Credit cards: The EMA agrees with HMT’s plans to apply the same cap on interchange fees as set out in the regulation (i.e. maximum of 0.3% per domestic or international transaction).
- Debit cards: The EMA agrees with HMT’s plans to apply a “weighted average” (i.e. interchange fees cannot exceed more than the equivalent of 0.2% of the annual average transaction value of all domestic debit card transactions within each payment card scheme). However the EMA raises concerns about the uncertainty this may bring for industry, and supports a review of the policy once its impact has been measured and analysed by the PSR.
- Three-party schemes: The EMA agrees with HMT’s proposal to exempt three-party schemes that do not exceed 3% of market share across all card products for the maximum 3 year period permitted under the regulation.
- Regulatory oversight: Agrees in principle with HMT’s proposed regulatory regime of splitting regulatory responsibilities between the PSR, the FCA, and the Trading Standards Institute. However the EMA raises concerns about the potential for duplication of effort for firms, and calls for guidance for firms setting out the remit and jurisdiction of each regulator.
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