UK Payment Systems Regulator Issues “Final Guidance” Heralding Major Changes In Operation Of Payment Systems

A View from Constantine Cannon’s London Office

By Yulia Tosheva and Irene Fraile

The UK Payment Systems Regulator (“PSR”) has published a final guidance on its approach to monitoring compliance with the EU Interchange Fee Regulation (“IFR”), which is changing the way payment systems operate in Europe.

The PSR, which was launched in April 2015, is an independent economic regulator that oversees the UK payments industry.  The PSR is the first regulator of its kind in the world.

The final guidance, which was issued on March 24, 2016, is of particular interest to payment card schemes, banks and merchants as it is the first document to shed light on the practical application of the IFR in the UK.  In view of the maturity and importance of the UK payment systems industry (currently valued at £75 trillion), the PSR’s guidance may assist other EU regulators in their implementation of the IFR.  It contains detailed provisions on the powers of the PSR to conduct investigations and to give directions, information-gathering, dispute resolution, and penalties for non-compliance.

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