PSR Sets Out Provisional UK Card Acquiring Remedies

June 30, 2022
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The Payment Systems Regulator (PSR) has published its provisional decision on remedies for the UK card-acquiring market review, following an initial consultation earlier this year.

The Payment Systems Regulator (PSR) has published its provisional decision on remedies for the UK card-acquiring market review, following an initial consultation earlier this year.

“Card acquiring services are important for the millions of people who pay by card and for the majority of UK businesses who accept cards. It’s vital that this market works well for everyone,” said Kate Fitzgerald, the PSR’s interim policy lead, as the regulator sets its sights on improving the status quo.

Earlier this year, the PSR consulted on four potential remedies to address concerns identified in its card-acquiring market review.

This review found the market does not work well for small and medium-sized merchants with annual card turnover below £50m.

Now, the PSR has set out three remedies, including greater transparency. This will mean that summary boxes containing bespoke key price and non-price information for every merchant can be used alongside new online quotation tools to help merchants compare prices and other service features more efficiently.

Greater engagement has also been touted by the supervisor. The PSR has suggested that trigger messages should be sent from providers to merchants to prompt them to shop around, re-negotiate their contract or switch to get the best deal they can.

The ability to change providers easily is a further remedy that the PSR wants to take advantage of.

Contractual limits will be placed on point of sale (POS) terminal contracts, so merchants are not discouraged from searching for and switching providers.

These will be a maximum duration of 18 months on POS terminal lease and rental contracts, and a maximum of one month's notice after any renewal.

The PSR intends to implement these remedies through Specific Directions, which will be given to the most significant providers of card-acquiring services to merchants.

"These remedies encourage transparency, engagement and comparison to help promote competition in the card acquiring market and to protect merchants by helping them get value for money,” said Fitzgerald.

The PSR has said that it is now seeking views from all stakeholders and interested parties on these latest proposals.

The consultation will close on August 3, with the regulatory authority planning to issue a final remedies notice later this year.

Earlier this week, the UK’s parliament’s Treasury Select Committee made public its letter to Chris Hemsley, the PSR’s head.

This followed Hemsley’s public hearing with the cross-party group of parliamentarians on May 25.

Among the questions that Hemsley has been requested to answer is whether the PSR can share any initial findings from its investigation into card acquiring and interchange fees, and whether it is considering an interim cap on card scheme fees or cross-border interchange fees while the investigation is ongoing.

Moreover, the PSR has been probed on when the New Payments Architecture programme is expected to be complete, as well as whether the regulator has sufficient resources and expertise across the organisation to fulfil its objectives and manage its various projects.

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