The PSR are consulting on their proposed approach to the allocation, calculation and collection of PSR regulatory fees for 2016/2017.
This consultation includes information on the PSR's regulatory fees that relate to their functions and activities under the Financial Services (Banking Reform) Act 2013 (FSBRA), and the new EU Interchange Fee Regulation (IFR).
Why are we publishing this paper?
The PSR are looking for feedback on their proposed approach to the allocation, calculation and collection of PSR fees for 2016/17. This document forms part of their annual cycle of fees consultation for 2016/17.
Consultation paper 15/44[1] [PDF]
What are the fees for 2016/17?
The PSR’s Annual Funding Requirement (AFR) for the year 2016/17 is approximately £15 million, which we are proposing to split across the PSR’s FSBRA and IFR functions as follows:
- £13.5 million for functions and activities in relation to FSBRA and concurrent competition powers
- £1.5 million for functions and activities in relation to the IFR
Who should read this document?
This consultation is relevant to participants in regulated payment systems under FSBRA, IFR regulated persons and PSPs which operate in the UK.
How are fees collected?
The PSR is funded entirely by the participants in the payment systems they regulate.
The FCA is responsible for funding the PSR, and can make rules to raise the fees to fund us. The FCA and PSR work together:
- to develop a proposed allocation approach for the PSR’s AFR
- a proposed approach to the calculation and collection of the PSR fees for 2016/17
- to consult on this proposed approach
Following this consultation, the FCA will make the fees rules which implement the approach to the PSR's regulatory fees for 2016/17.
What do I need to know?
Fees need to be paid to fund the PSR's activities and functions under FSBRA and the IFR as follows:
FSBRA
The PSR is proposing to follow the same approach as last year. Their FSBRA-related AFR will be allocated equally across Bacs, CHAPS, C&C/NICC, FPS, LINK, MasterCard and Visa. Fees will be collected on the PSR's behalf by the systems operators from their PSP members, acquirers and card issuers proportionally to their transaction volumes (or shareholdings in the case of NICC).
IFR
On 9 December 2015 the PSR became the competent authority for monitoring and enforcing compliance with the IFR in the UK. They have also been given additional powers to collect fees for their functions and activities under the IFR.
The PSR is proposing a separate, three-tier, approach to the allocation of their funding requirement across the card payment systems that operate in the UK and are subject to the IFR (American Express, Diners Club, JCB Europe, MasterCard, Union Pay International and Visa), as follows:
- equal allocation across the larger IFR card payment systems
- those with a more limited UK presence would pay a flat fee
- the systems with the smallest UK presence would pay nothing
As for FSBRA, the systems operators will collect the PSR fees on the PSR's behalf from their acquirers and card issuers proportionally to their transaction volumes.
What happens next?
The PSR want stakeholders with an interest in the PSR's regulatory fees to let the PSR know what they think by emailing the PSR at: [email protected]
The deadline for comments and responses to the PSR consultation is 5pm on Thursday 11 February 2016.
Next steps
Once the consultation has closed, the PSR will consider the responses received and the PSR will publish their final approach to the allocation, calculation and collection of 2016/17 fees in spring 2016. At the same time the PSR will consult on the level of fees that need to be paid, with the final decision and fees rules being published in the summer 2016.