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FEES 9.1 Application and purpose

Application

FEES 9.1.1 R RP

1This chapter applies to:4

  1. (1)

    operators of regulated payment systems;4

  2. (2)

    operators of IFR card payment systems; and4

  3. (3)

    direct payment service providers.4

2 2

Purpose

FEES 9.1.2 G RP

This chapter sets out the fee payable by a direct payment service provider2 or an operator of an IFR card payment system4 to establish and fund the PSR.

Introduction

FEES 9.1.3 G RP

Section 40(1) of FSBRA (The Payment Systems Regulator) requires the FCA to establish the PSR.

FEES 9.1.4 G RP
  1. (1)

    Paragraph 9 of Schedule 4 of FSBRA and the 2015 Interchange Regulations applying FSBRA in a modified form allow3 the FCA to make rules requiring participants2 in regulated payment systems to pay the FCA specified amounts or amounts calculated in a specified way to:

    1. (a)

      meet the relevant costs referred to in (2) below; and

    2. (b)

      enable the PSR to maintain adequate reserves.

  2. (1A)

    The specified amount or amounts calculated in a specific way in (1) are PSR fees which are levied for the funding of the PSR’s functions and activities in relation to:3

    1. (a)

      regulated payment systems on participants in regulated payment systems; and3

    2. (b)

      the IFR on regulated persons.3

  3. (2)

    The relevant costs in (1)(a) means:

    1. (a)

      the expenses incurred, or expected to be incurred, by the PSR in connection with the discharge of its functions;

    2. (b)

      the expenses incurred by the FCA in establishing the PSR;

    3. (c)

      any other expenses incurred by the FCA in connection with the discharge of its functions under Part 5 of FSBRA; and

    4. (d)

      any expenses incurred, or expected to be incurred, by the FCA in connection with the discharge of the PSR's functions by an officer or member of staff of the FCA under arrangements made under paragraph 5 of Schedule 4 of FSBRA.

  4. (3)

    The amounts in (1) may include the expenses of the FCA in collecting PSR fees.

FEES 9.1.5 G

FEES 9 sets out the rules referred to in FEES 9.1.4 G

FEES 9.1.6 G RP

The FCA must pay to the PSR the amounts that it receives as PSR fees, apart from the following amounts (which it may keep):

  1. (1)

    expenses under FEES 9.1.4G (2)(b) to (d); and

  2. (2)

    collection costs, referred to in FEES 9.1.4G (3).

Annual budget and annual plan

FEES 9.1.7 G RP
  1. (1)

    Paragraph 4(1) of Schedule 4 of FSBRA requires the PSR to adopt an annual budget which has been approved by the FCA.

  2. (2)

    Paragraph 6(1) of Schedule 4 of FSBRA requires the PSR to prepare an annual plan which has been approved by the FCA.

FEES 9.1.8 G RP
  1. (1)

    PSR fees will vary from year to year, depending on the PSR's annual plan and budget.

  2. (2)

    These details are in FEES 9 Annex 1 R.

  3. (3)

    The FCA will prepare and consult on new details for each fee year.

FEES 9.2 PSR fees

Obligation to pay PSR fees

FEES 9.2.1 R RP

A direct payment service provider, acquirer,4card issuer2 or operator of an IFR card payment system4 must pay the PSR fees applicable to it and calculated as set out2 in FEES 9 Annex 1 R:

1
  1. (1)

    in full and without deduction; and

  2. (2)

    in accordance with this chapter, subject to:4

    2
    1. (a)

      FEES 9.2.1AR;4

    2. (b)

      FEES 9.2.1CR;4

    3. (c)

      FEES 9.2.1DR; and4

    4. (d)

      FEES 9.2.1FR.4

FEES 9.2.1A R RP

2If either of the following tests is met by an acquirer or card issuer in a card payment system3 in any given fee year, the transaction volumes attributable to that acquirer or card issuer are not to3 be included in the payment system denominator for that card payment system for that fee year, and that acquirer or card issuer is not required to pay any PSR fee in respect of the payment system allocation to that card payment system4 for that fee year where:

3
  1. (1)

    the PSR fee for that acquirer or card issuer calculated as set out in FEES 9 Annex 1 R would be less than £50 for the current fee year for that card payment system4 if FEES 9.2.1AR were not applied; or

  2. (2)

    a direct payment service provider in that card payment system4 realises in total3 less than 100,000 transactions by an acquirer operating in the United Kingdom plus4transactions by a card issuer operating in the United Kingdom3 in the relevant time period.3

  3. (3)

    [deleted]3

FEES 9.2.1B R RP
  1. (1)

    3If a payment service provider (A) acquires all or part of the business of another payment service provider which includes transaction volumes (B), whether by merger, acquisition or transfer, during the course of a fee year, the liability for paying the PSR fee in the following fee year in relation to B shall rest with A.

  2. (2)

    FEES 9.2.1BR(1)4 also applies when the business acquired, transferred or merged is not a legal entity but is an unincorporated business, or is in the form of assets and/or contracts.

FEES 9.2.1C R RP
  1. (1)

    4If an acquirer or card issuer meets either of the following tests in an IFR card payment system in any given fee year, the transaction volumes attributable to that acquirer or card issuer are not to be included in the payment system denominator for that IFR card payment system for that fee year, and that acquirer or card issuer is not required to pay any PSR fee in respect of the payment system allocation to that IFR card payment system for that fee year where:

    1. (a)

      the PSR fee for that acquirer or card issuer calculated as set out in FEES 9 Annex 1R would be less than £50 for the current fee year for that IFR card payment system if FEES 9.2.1CR were not applied; or

    2. (b)

      a direct payment service provider in that IFR card payment system realises in total less than 100,000 IFR transactions by an acquirer operating in the United Kingdom plus IFR transactions by a card issuer operating in the United Kingdom in the relevant time period.

  2. (2)

    If the total number of IFR transactions by an acquirer operating in the United Kingdom plus IFR transactions by a card issuer operating in the United Kingdom under a given IFR card payment system in the relevant time period amount to less than 100,000, no payment system allocation must be made to that IFR card payment system for the relevant fee year, and the acquirers, card issuers and operator in that IFR card payment system are not required to pay any PSR fee in respect of that IFR card payment system for that fee year.

FEES 9.2.1D R RP

4If there is a payment system allocation for a given fee year to an IFR card payment system (as set out in Table C of FEES 9 Annex 1R), and none of the acquirers and card issuers in that IFR card system is required to pay any PSR fee for that fee year as a result of the application of FEES 9.2.1CR(1), then the operator of that IFR card payment system must pay the entire payment system allocation for that IFR card payment system as PSR fees for that fee year.

FEES 9.2.1E R RP

4If:

  1. (1)

    there is a payment system allocation for a given fee year to a card payment system or to an IFR card payment system (in either Table A or Table C of FEES 9 Annex 1R respectively); and

  2. (2)

    the operator of that payment system is acting as an acquirer, as a card issuer or as both an acquirer and card issuer in that card payment system or IFR card system;

that operator must pay the entire payment system allocation for that card payment system or IFR card payment system as PSR fees for that fee year.

FEES 9.2.1F R RP

4Where FEES 9.2.1ER applies, no other acquirers or card issuers are required to pay any PSR fee for that card payment system or IFR card system in accordance with FEES 9.2.1R.

FEES 9.2.1G G RP

4Where FEES 9.2.1ER applies, the payment system denominator for that card payment system or IFR card payment system is not included in column 6 of Table A or Table C, as appropriate, of FEES 9 Annex 1R.

Time of payment

FEES 9.2.2 R RP

If the PSR fee paid by a direct payment service provider2 for the previous fee year for a particular regulated payment system2 or IFR card payment system4 was at least £20,0002, that direct payment service provider2 must pay to the operator of that particular regulated payment system or IFR card payment system4:

3
  1. (1)

    an amount equal to 50% of the PSR fee payable for the previous fee year, by 152 March at the end of the previous3fee year; and

  2. (2)

    the balance of the PSR fee due by 15 September4 in the current fee year.

    2
FEES 9.2.2A R

2The operator of each regulated payment system or IFR card payment system4 must pay the amounts collected (as collection agent for the FCA) under FEES 9.2.2R to the FCA by the following dates:

  1. (1)

    13 April in the current fee year;

  2. (2)

    1 October4 in the current fee year.

FEES 9.2.2B R RP

4If an operator of an IFR card payment system or card payment system is liable to pay PSR fees itself under FEES 9.2.1DR or FEES 9.2.1ER, and the PSR fee it paid for the previous fee year for its IFR card payment system or card payment system was at least £20,000, that operator must pay to the FCA:

  1. (1)

    an amount equal to 50% of the PSR fee payable for the previous fee year, by 15 March at the end of the previous fee year; and

  2. (2)

    the balance of the PSR fee due by 15 September in the current fee year.

[Note: Transitional provisions apply to FEES 9.2.2R to FEES 9.2.2BR inclusive: see FEES TP 12.4]

FEES 9.2.3 R RP

If the PSR fee paid by a direct payment service provider for a particular regulated payment system2 or IFR card payment system4 for the previous fee year was less than £20,0002, the direct payment service provider2 must pay its PSR fee in full to the operator of that regulated payment system or IFR card payment system4:

3
  1. (1)

    by 152 September4 in the current fee year; or

  2. (2)

    if later, within 30 days of the date of the invoice2.

2
FEES 9.2.3A R

2The operator of each regulated payment system and IFR card payment system4 must pay the amounts collected (as collection agent for the FCA) under FEES 9.2.3R to the FCA by the following date:

  1. (1)

    1 October4 in the current fee year; or

  2. (2)

    if later, within 15 days of the date payment of an amount in respect of PSR fees is received by the operator from a direct payment service provider.

4

3
FEES 9.2.3B R RP

4If an operator of an IFR card payment system or card payment system is liable to pay PSR fees itself under FEES 9.2.1DR or FEES 9.2.1ER, and the PSR fee it paid for the previous fee year for its IFR card payment system or card payment system was less than £20,000, that operator must pay its PSR fee in full to the FCA5

by 15 September in the current fee year5.

Method of payment and invoicing2

FEES 9.2.4 G RP

A direct payment service provider2 should pay its fees by electronic credit transfer and should notify the operator to whom it is paying the relevant PSR fee2 if it intends to pay in another way.

FEES 9.2.4A R RP

2A direct payment service provider must pay its PSR fees to the operator (acting as collection agent for the FCA) of the regulated payment system or IFR card payment system4 to which the fee relates.

FEES 9.2.4B R

2The operator of a regulated payment system or an IFR card payment system4, acting as collection agent for the FCA, must pay to the FCA the amounts it receives from or on behalf of direct payment service providers under FEES 9.2.4AR.

FEES 9.2.4C R

2With respect to invoices for PSR fees4:

  1. (1)

    the operator of each regulated payment system or IFR card payment system4 must issue invoices to its direct payment service providers for the amount of the PSR fee relating to each direct payment service provider for their participation in that regulated payment system or IFR card payment system4;

  2. (2)

    invoices must be separate invoices which include only the amount of the PSR fee applicable to each direct payment service provider, and must include no other charges, fees, administrative or handling fees;

  3. (3)

    invoices must be issued by the operator on a sufficiently timely basis to enable the direct payment service providers to pay PSR fees to the operator4 (acting as collection agent for the FCA) by the dates specified in FEES 9.2.2R and 9.2.3R; and4

  4. (4)

    4the requirements of FEES 9.2.4CR(1), (2) and (3) also apply where the operator of a card payment system or IFR card payment system is liable to pay PSR fees itself under FEES 9.2.1DR or FEES 9.2.1ER.

FEES 9.2.4D R RP
  1. (1)

    2The operator of a regulated payment system or IFR card payment system4 must provide to the PSR, for each of its direct payment service providers (and for itself, where it is an operator acting as an acquirer or card issuer)4, a copy of:

    1. (a)

      its calculations (as specified in column 3 of Tables A and C4 of FEES 9 Annex 1R); and

    2. (b)

      the underlying data (as specified in column 5 of Tables A and C4 of FEES 9 Annex 1 R).

  2. (2)

    The operator of a regulated payment system or IFR card payment system4 must:3

    1. (a)

      provide the information in (1) to the PSR as soon as possible once FEES 9 Annex 1R is updated for a fee year; and3

    2. (b)

      obtain the PSR’s agreement to the individual PSR fees on a sufficiently timely basis to be able to issue invoices to direct payment service providers in accordance with FEES 9.2.4CR.3

  3. (3)

    The operator of each regulated payment system and IFR card payment system4 must provide to the PSR an updated version of the information set out in FEES 9.2.4DR(1) by no later than two working days after the dates set out in FEES 9.2.2R and FEES 9.2.3R, indicating which direct payment service providers have not paid, or not paid in full, their PSR fees.3

FEES 9.2.4E G

2An operator of a regulated payment system or an IFR card payment system4 should pay the amounts due to the FCA under FEES 9.2.2BR, FEES 9.2.3BR and4FEES 9.2.4BR by electronic credit transfer and should notify the FCA if it intends to pay in another way.

FEES 9.2.4F G RP

5With respect to invoices for PSR fees, an operator of a regulated payment system or an IFR card payment system should round any monetary sums to two decimal points.

2Ceasing to be designated as a regulated payment system, ceasing to be a direct payment system provider of a regulated payment system or IFR card payment system, and ceasing to be subject to the IFR

FEES 9.2.5 G RP

The FCA will not relieve or refund a PSR fee if after the start of that fee year:4

2
  1. (1)

    4a payment system ceases to be a regulated payment system; or4

  2. (2)

    4an IFR card payment system ceases to be subject to the IFR;4 or

  3. (3)

    4a person4 ceases to be a direct payment service provider of a regulated payment system or an IFR card payment system4.

FEES 9.2.6 R RP

If a payment system ceases to be a regulated payment system, or an IFR card payment system ceases to be subject to the IFR4, all direct payment service providers of that system, and the operator of that IFR card payment system,4 must pay any outstanding PSR fees before the system ceases to hold that status.

2 2
FEES 9.2.6A R RP

If a person4 ceases to be:4

2
  1. (1)

    4a direct payment service provider of a regulated payment system or of an IFR card payment system4, it must pay any outstanding PSR fees in respect of that system, before it ceases to be a direct payment system provider of the system; or4

  2. (2)

    4the operator of a IFR card payment system, it must pay any outstanding PSR fees in respect of that system before it ceases to be the operator of that IFR card payment system4.

Late payments

FEES 9.2.7 R RP

If a direct payment service provider2 or an operator of an IFR card payment system4 does not pay the total amount of its PSR fees before the end of the date on which it is due, it must pay to the FCA2:

  1. (1)

    an administrative fee of £250; plus

  2. (2)

    interest on any unpaid part of the fee at an annual rate of 5% above the Official Bank Rate from time to time in force, accruing daily from the date on which the amount concerned became due.

FEES 9.2.7A G RP
  1. (1)

    2The FCA may recover a PSR fee as a debt owed to it under paragraph 23 (8) of Schedule 1ZA of the Act.

  2. (2)

    The FCA will consider taking action for the recovery (including interest) through the civil courts.

Reduction, remission and repayment of fees

FEES 9.2.8 G RP

The FCA may reduce or remit all or part of a PSR fee, if it appears to the FCA, having consulted the PSR, that in the exceptional circumstances of a particular case paying all or part of it would be inequitable.

FEES 9.2.9 G RP

The FCA may refund all or part of a PSR fee if it appears to the FCA, having consulted the PSR, that in the exceptional circumstances of a particular case the FCA or the PSR retaining all or part of it would be inequitable.

FEES 9.2.10 G RP

The FCA will not consider a claim to refund a PSR fee due to a mistake of fact or law by the fee paying direct payment service provider2 or operator of an IFR card payment system4 if the claim is made more than two years after the beginning of the fee year to which the fee relates.

VAT

FEES 9.2.11 R RP

PSR fees payable are stated net of VAT. Where VAT is applicable this must also be included.

FEES 9 Annex 1 PSR fees for the period 1 April 320176 to 31 March 320186

R

Table A3 below shows the PSR fee applicable to the direct payment system providers, acquirers and card issuers2 of each regulated payment system.

Table A

1

6 Regulated payment system

(column 1)

Payment system allocation for 2017/18 (£)

(column 2)

Calculation methodology for PSR fee payable by direct payment service providers, acquirers and card issuers of regulated payment systems

(column 3)

Relevant time period

(column 4)

Relevant transaction volumes or shareholdings, as applicable

(column 5)

Payment system denominator

(column 6)

(rounded to the nearest 500)

Bacs

£1,628,571

The PSR fee is calculated for each individual direct payment service provider proportionally to the relevant transaction volumes processed, issued or acquired on behalf of that direct payment service provider through the regulated payment system in question during the relevant time period.

The calculation formula is: payment system allocation multiplied by direct payment service provider’s relevant transaction volumes divided by payment system denominator.

1 January to 31 December 2016

All transactions processed through the Bacsregulated payment system. Transactions include both the initiation of the transfer of funds, and the receipt of transferred funds.

12,436,987,000

C&C

£1,579,302

1 July to 31 December 2016

All transactions including ‘in clearing’ and ‘out clearing’ transactions for GBP, USD and EUR processed through the C&Cregulated payment system.

354,564,500

CHAPS

£1,628,571

1 January to 31 December 2016

All MT103 and MT202 transactions processed through the CHAPSregulated payment system. Transactions include both the initiation of the transfer of funds, and the receipt of transferred funds.

77,764,500

FPS

£1,628,571

1 January to 31 December 2016

All transactions processed through the FPSregulated payment system. Transactions include both the initiation of the transfer of funds, and the receipt of transferred funds.

2,852,185,500

LINK

£1,628,571

1 January to 31 December 2016

All transactions issued and acquired under the LINKregulated payment system, including GBP cash withdrawals, foreign currency dispenses, balance enquiries, PIN management, charity donations, non-cash transactions and mobile payment transactions, but excluding ‘on us’ transactions. Both issuing and acquiring transactions are taken into account.

6,341,414,500

MasterCard

£1,628,571

General calculation methodology:

The PSR fee is calculated for each individual acquirer and card issuer proportionally to the relevant transaction volumes under the card payment system in question during the relevant time period.

The calculation formula is: payment system allocation multiplied by acquirer or card issuer’s relevant transaction volumes divided by payment system denominator.

Exception pursuant to FEES 9.2.1ER:

Where the operator of a card payment system is acting as an acquirer, as a card issuer or as both, the PSR fee is equal to the payment system allocation for that card payment system.

1 January to 31 December 2016

All transactions by acquirers operating in the United Kingdom and transactions by card issuers operating in the United Kingdom under the MasterCardregulated payment system, including point of sale transactions, merchant sales volumes, and cash purchase transactions on cards, but excluding cash-only withdrawals. All MasterCard-branded transactions are included irrespective of the processing entity (MasterCard itself, a third party processing entity or ‘on us’ transactions). Both issuing and acquiring transactions are taken into account.

5,440,165,500

(prior to any adjustment resulting from the application of FEES 9.2.1AR)

Visa

£1,628,571

1 January to 31 December 2016

All transactions by acquirers operating in the United Kingdom and transactions by card issuers operating in the United Kingdom under the Visaregulated payment system, including point of sale transactions, merchant sales volumes, and cash purchase transactions on cards, but excluding cash-only withdrawals. All Visa-branded transactions are included irrespective of the processing entity (Visa itself, a third party processing entity or ‘on us’ transactions). Both issuing and acquiring transactions are taken into account.

27,169,986,000

(prior to any adjustment resulting from the application of FEES 9.2.1AR)

NICC

£49,269

The PSR fee is calculated for each direct payment service provider proportionally to its shareholding in the operator of the NICCregulated payment system during the relevant time period.

The calculation formula is: payment system allocation multiplied by direct payment service provider’s shareholding in the capital of the Belfast Bankers’ Clearing Company Ltd (expressed as a percentage).

December 2016

All shareholdings held in Belfast Bankers’ Clearing Company Ltd, the operator of the NICCregulated payment system.

Not applicable

6Table B below shows the tiers and their levels for determining how the payment system allocation is allocated to individual IFR card payment systems.

4 Table B

6 Relevant IFR transaction volumes

(column 1)

Relevant time period

(column 2)

Tier

(column 3)

Payment system denominator

(rounded to the nearest ‘000)

(column 4)

Allocation methodology for the payment system allocation for 2017/18 for each IFR card payment system

(column 5)

All IFR transactions by acquirers operating in the United Kingdom and IFR transactions by card issuers operating in the United Kingdom (or those by the operator of that IFR card payment system acting as such an acquirer or card issuer) under that IFR card payment system, including point of sale transactions, merchant sales volumes, and cash purchase transactions on cards, but excluding cash-only withdrawals.

All transactions under the brand of that IFR card payment system are included irrespective of the processing entity (the operator or IFR card payment system itself, a third party processing entity or ‘on us’ transactions).

Both issuing and acquiring transactions are taken into account for each IFR card payment system.

1 January to 31 December 2016

3

Total relevant IFRtransaction volumes for the IFR card payment system in question of <100,000 in the relevant time period

(application of FEES 9.2.1DR)

Exemption from PSR fees

2

Total relevant IFRtransaction volumes for the IFR card payment system in question of between 100,000 and 10,000,000 in the relevant time period

(prior to any adjustment resulting from the application of FEES 9.2.1CR)

Payment system allocation to each relevant IFR card payment system amounting to 0.5% of the total 2017/18 funding requirement in relation to the PSR’s IFR functions and activities

1

Total IFRtransaction volumes for the IFR card payment system in question of greater than 10,000,000 in the relevant time period

(prior to any adjustment resulting from the application of FEES 9.2.1CR)

Equal payment system allocation to each relevant IFR card payment system for the remaining total 2017/18 funding requirement in relation to the PSR’s IFR functions and activities

6Table C below shows the PSR fee applicable to the acquirers, card issuers and operators of each IFR card payment system.

4 Table C

6 IFR card payment system

(column 1)

Payment system allocation for 2017/18 (£)

(column 2)

Calculation methodology for PSR fee payable by acquirers, card issuers and operators of IFR card payment systems

(column 3)

Relevant time period

(column 4)

Relevant IFR transaction volumes

(column 5)

Payment system denominator

(column 6)

(rounded to the nearest ‘000)

JCB

Nil

General calculation methodology:

The PSR fee is calculated for each individual acquirer and card issuer proportionally to the relevant transaction volumes under the IFR card payment system in question during the relevant time period.

The calculation formula is: payment system allocation multiplied by acquirer or card issuer’s relevant transaction volumes divided by payment system denominator.

The figure in column 6 of Table C is the payment system denominator set out in column 6 of Table A, and it must be adjusted for the purposes of Table C by the operator to reflect the total relevant transaction volumes for that IFR card payment system, including IFR transactions by acquirers operating in the United Kingdom plus IFR transactions by card issuers operating in the United Kingdom, as set out in column 5 of Table C.

Exception pursuant to FEES 9.2.1DR or FEES 9.2.1ER:

Where the operator of an IFR card payment system is acting as an acquirer, as a card issuer or as both, the PSR fee is equal to the payment system allocation for that IFR card payment system.

1 January to 31 December 2016

All IFR transactions by acquirers operating in the United Kingdom and IFR transactions by card issuers operating in the United Kingdom (or by the operator of that IFR card payment system acting as such an acquirer or card issuer) under that IFR card payment system, including point of sale transactions, merchant sales volumes, and cash purchase transactions on cards, but excluding cash-only withdrawals.

All transactions under the brand of that IFR card payment system are included irrespective of the processing entity (the operator or the IFR card payment system itself, a third party processing entity or ‘on us’ transactions).

Both issuing and acquiring transactions are taken into account for each IFR card payment system.

Not applicable as a result of the application of FEES 9.2.1DR

UPI

Nil

Not applicable as a result of the application of FEES 9.2.1DR

Diners Club

£3,000

Not applicable as a result of the application of FEES 9.2.1GG

AmEx

£199,000

Not applicable as a result of the application of FEES 9.2.1GG

MasterCard

£199,000

5,440,165,500

(prior to any adjustment resulting from the application of FEES 9.2.1CR and prior to any adjustments by the operator as set out in column 3 of Table C to reflect the relevant transaction volumes for that IFR card payment system)

Visa

£199,000

27,169,986,000

(prior to any adjustment resulting from the application of FEES 9.2.1CR and prior to any adjustments by the operator as set out in column 3 of Table C to reflect the relevant transaction volumes for that IFR card payment system)