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HM Treasury has published a draft version of the Interchange Fee (Amendment) (EU Exit) Regulations 2018, along with explanatory information. The draft Regulations will primarily affect payment system operators, payment service providers (including banks and building societies) and the businesses and individuals who rely on card payment systems. The Payment Systems Regulator will consult separately on consequential changes to its guidance on the IFR once the draft Regulations are made. The PSR will also be responsible for correcting deficiencies in the Binding Technical Standards made under the IFR.
The draft Regulations amend the EU Interchange Fee Regulation that will be retained on Brexit and the Payment Card Interchange Fee Regulations 2015. The changes are designed to ensure that current laws on interchange fees continues to operate effectively in the U.K. once the U.K. has left the EU.
Among other things, the amendments include changes:
In the explanatory information accompanying the draft Regulations, HM Treasury notes that reducing the scope of the IFR (to the U.K. only) could lead to higher costs for merchants participating in U.K.-EEA cross-border transactions, since these transactions will no longer be subject to the interchange fee caps. Higher interchange fees could be passed on to consumers, either directly or indirectly.
HM Treasury intends to lay the draft Regulations before Parliament before exit day and the Regulations will enter into force on exit day.
View the draft Regulations.
View the explanatory information.