UK PSR consults on remedies following market review of card scheme and processing fees

The UK Payment Systems Regulator (PSR) has published its consultation CP25/1 on potential remedies to address findings following the PSR's final report (published on 6 March) on its review of card schemes and processing fees. The consultation seeks to address the findings of the review, namely that there were ineffective competitive restraints, fees have risen without sufficient evidence of the rationale, and there is insufficiently clear and detailed information provided in respect of costs and pricing. The proposals in the consultation paper relate to:

• Information transparency and complexity remedies – to ensure that acquirers have sufficient information to understand the fees they are charged and enable merchants to make informed decisions about fees. The PSR is also seeking input on the reduction of the volume of fees being charged, and complexity.
• Regulatory financial reporting – this would provide the PSR with more detailed and accurate information of the profits the card schemes earn from UK businesses so it can monitor their performance and assess whether any future regulatory action is needed.
• Pricing governance – the proposals impose requirements on the schemes in respect of their pricing decisions, including three pricing principles that would need to be considered when making any changes.
• Publication of scheme information – this remedy would require card schemes to publish: (i) financial and performance-based metrics on UK businesses such as the number of transactions and approximate revenue from scheme and processing fees; and (ii) information about the schemes' regulatory financial reporting and pricing governance.

The deadline for comments is 28 May. If the PSR decides to proceed with the proposed remedies, there will be a further consultation on the specific remedy package including a draft cost benefit analysis and a draft direction.

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