UK government reviews regulations for payment services and card interchange fees

Tuesday 24 January 2023 10:22 CET | News

HM Treasury has published a call for evidence on Payment Services Regulations 2017 (PSRs 2017) and a post-implementation review of Payment Card Interchange Fee Regulations 2015.


As explained by legal consultancy Hogan Lovells, both publications anticipate further changes to the regulatory framework as the Future Regulatory Framework for UK financial services is implemented following the passage of the Financial Services and Markets Bill.

The regulatory review acknowledges the wide range of ongoing policy development and legislative change facing the payments and fintech sector and reassurance that there will be no policy change for change’s sake. Treasury identified some elements of the framework that may be repealed and replaced to an accelerated timescale, including measures highlighted in the government’s review of the systemic perimeter and in this review of the PSRs (enhancing fraud prevention, safeguarding, and the fair protection of customers in terminating payment services).


HM Treasury has published a call for evidence on Payment Services Regulations 2017 (PSRs 2017) and a post-implementation review of Payment Card Interchange Fee Regulations 2015.

PSRs 2017 review findings

The Treasury is required by law to carry out a review of the PSRs (which implemented the second EU Payment Services Directive (PSD2)) and publish a report setting out its conclusions. Its review has found that, while the PSRs have fostered a competitive UK payment sector that is recognised globally, the regulations have not gone far enough on their own.

The regulatory review identified a number of key areas where the current regulatory framework for payments is potentially not working as well as it could:

  • Changes to the safeguarding regime: The government invites the FCA to consult on this later in 2023;

  • Access to payment systems: The government intends to ensure there is a single and effective regime governing access to payment systems, in place of regulatory overlap. The government will set out its next steps on this later in 2023;

  • Treasury response to consultation on payments regulation and the systemic perimeter: The Treasury confirms that it is currently considering responses to its July 2022 consultation and that it will set out its response later in 2023;

  • Fraud prevention and customer protection on termination of payment services: In addition to the above, the Treasury also suggests that the measures on enhancing fraud prevention and the fair protection of customers in relation to the termination of payment services referred to in this PSRs review may be subject to an ‘accelerated timescale’.

PSRs 2017 Call for evidence

The UK government is reviewing the payments regulation system and has issued a call for evidence to gather input on how to update the system to meet the government's goals and address challenges. 

The call for evidence includes questions on a variety of topics, such as the need for agile and proportionate regulation, the future-proofing of definitions and scope for the rapidly changing payments and data landscape, and consumer protection. 

One specific area of focus is the Payment Card Interchange Fee Regulations 2015 (PCIFRs), which were implemented to cap interchange fees for consumer debit and credit cards and designate the Payment Systems Regulator (PSR) and the Financial Conduct Authority (FCA) as the responsible monitoring authorities. The government is conducting a post-implementation review of the PCIFRs to assess their effectiveness and determine if changes are needed.

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Keywords: regulation, Interchange Fee Regulation, payments , payment processing
Categories: Payments & Commerce
Countries: United Kingdom
This article is part of category

Payments & Commerce