Card scheme and processing fees: the PSR compliance clock has started
In short: Card scheme and processing fees charged by Mastercard and Visa are now subject to two PSR specific directions given on 30 July 2026. The pricing governance obligations start on 30 November 2026 and the information requirements start on 30 July 2027, with the first letters to acquirers due by 30 October 2026.
A business that takes card payments pays for that through its acquirer, and the acquirer pays Mastercard and Visa a list of scheme and processing fees that it has often been unable to explain, check against the bill, or avoid. From 30 July 2027 each scheme has to tell its acquirers, for every fee charged on a UK transaction, what the fee is for, how it is triggered and how it is calculated. A separate obligation on how the schemes make pricing decisions starts on 30 November 2026. The Payment Systems Regulator confirmed both on 30 July 2026, and the intervening deadlines run from that date.
Key findings (PSR, PS26/1 and Specific Directions 22 and 23)
- The PSR gave Specific Direction 22 (information, transparency and complexity) and Specific Direction 23 (pricing governance) to Mastercard and Visa under section 54 of the Financial Services (Banking Reform) Act 2013 (FSBRA 2013), applying to specified persons under section 54(3)(c). Source: PS26/1, paragraph 1.5; PSR specific directions register.
- The materiality threshold in each direction changed once after consultation, in both level and basis, from £100,000 of annual net revenue to £250,000 of annual gross revenue. Source: PS26/1, paragraphs 1.8, 2.5 and 3.5.
- The reconciliation requirement changed. The schemes now have to give acquirers the fee logic rather than the transaction-level identifiers the PSR consulted on. Source: PS26/1, paragraphs 1.9 and 2.5.
- The PSR put the pricing governance compliance cost across both schemes at £2.2 million up front and £1.1 million a year. The equivalent figures for the information remedy are redacted. Source: PS26/1, Annex 2, Table 4 and footnote 287.
- Nine parties responded to the December 2025 consultation. Mastercard said neither remedy was justified but did not object in principle to proportionate implementation; Visa said the information remedy rested on unsystematic evidence and that the pricing governance remedy was unnecessary and duplicative. Source: PS26/1, paragraphs 1.7, 2.9 to 2.11 and 3.9 to 3.10.
- No price control forms part of the package. The PSR consulted on four remedies in April 2025, adopted two, did not pursue the publication of schemes’ information remedy, and continued work on regulatory financial reporting. Source: PS26/1, paragraphs 1.2 and 1.4.
| Date | What each scheme has to do by then | Where the obligation sits |
|---|---|---|
| 30 July 2026 | Both directions come into force. The implementation clocks start. The substantive information requirements are deferred. | SD22 paragraph 15.1; SD23 paragraph 13.1 |
| 30 October 2026 | Write to acquirers with the proposed compliance policy, explaining what the scheme already complies with and what it proposes to change, and seek their views. | SD22 paragraph 4.3 |
| 30 November 2026 | Have pricing governance compliance processes, controls and training in place, and notify the PSR of them. Fee decisions taken from this date need a signed written record. | SD23 paragraphs 4.2 and 4.3 |
| 30 January 2027 (a Saturday, so in time on Monday 1 February 2027) | Write to acquirers again, summarising their feedback, giving the scheme’s overall view of the points made, and confirming the timetable for any further change. | SD22 paragraphs 4.4 and 13.3(e) |
| 30 July 2027 | Comply with the information requirements in full, and give the PSR the updated compliance policy and a summary of the acquirer engagement. | SD22 paragraphs 4.1 and 4.5 |
| 1 November 2027 (Visa) 31 January 2028 (Mastercard) | File the first annual overview of fee decisions and the first pricing governance compliance report. Visa’s first period runs 1 January to 30 September 2027 and Mastercard’s 1 January to 31 December 2027, each filed within one month of the period end. | SD23 paragraphs 4.6, 4.7, 4.9 and 4.10 |
| 30 January 2028 | Earliest implementation date for a fee caught by the advance-notice requirement, which applies to fees introduced or changed six or more months after 30 July 2027. | SD22 paragraph 17.11, definitions of New and Modified Scheme and Processing Fees |
What the two directions require
Specific Direction 22 sets a single outcome and two requirements. The outcome, in paragraph 3.3, is that an acquirer exercising reasonable care and skill can work out how a fee was triggered, forecast what it will cost, reconcile the fees invoiced in a billing period, allocate those fees to transactions with a UK point of sale other than fees not driven by a transaction, and decide whether to buy an optional service or to change behaviour to avoid a behavioural fee. ITC1, the first requirement, covers the scheme and processing fees charged on UK transactions. ITC2 covers new and modified fees other than opt-in optional fees, and has to be met at least six months before the fee takes effect. ITC2 applies to fees introduced or changed six or more months after 30 July 2027, so the earliest fee it catches is one implemented on 30 January 2028.
The minimum content sits in the annexes: for each fee, its category (mandatory scheme fee, mandatory processing fee, optional fee or behavioural fee), a description covering the activity charged for, the collection frequency, the geography and the benefit provided, a unique billing identifier used consistently in every interaction with acquirers about fees, and the rates and units, including currency, transaction applicability, pricing structure and tiering as appropriate. Behavioural fees require more: the behaviour the scheme wants to change, why, and what acquirers and merchants can do to avoid the charge. Optional fees have to be labelled opt-in or opt-out, with an explanation of how to decline an opt-out service. Neither scheme may add to, or increase, any charge that already applies for access to its information systems in order to supply this.
Specific Direction 23 applies to the schemes’ own decision-making. When considering a proposal for a new or changed acquirer fee, each scheme has to pay due regard to service users’ interests, which the direction defines as assessing, so far as reasonably practicable in the circumstances, the effect on the acquiring side of the market and on competition, innovation and the resilience of payment systems, including the specific considerations listed in Annex 1. It then has to keep a signed acquirer fee decision record documenting the purpose of the fee, its structure, the basis for approval, the anticipated first-year net revenue impact on UK transactions with the assumptions behind it, and whether the change is linked to any change in the scheme’s costs, together with a schedule of every document put to the senior managers or pricing committee that approved it. Those records are kept for ten years and produced to the PSR within ten working days of a request or thirty working days of the decision, whichever is later.
How the £250,000 thresholds work
Each direction carries a materiality threshold of £250,000 of gross revenue in the full financial year after the fee takes effect, and the two do not operate identically. Under Specific Direction 22, paragraph 5.1 disapplies the whole of ITC2 to a fee expected to generate below that figure on UK point of sale transactions, which removes the advance notice and the behavioural-fee impact information alike, though the scheme has to report the actual revenue afterwards. Under Specific Direction 23, paragraph 5.1 applies the record-keeping and pricing-principle requirements only where the fee is expected to generate in excess of £250,000 in the UK, so a fee anticipated at exactly £250,000 falls inside the information requirement and outside the record-keeping one. Specific Direction 23 also carries an anti-fragmentation rule: where a scheme adopts several fee decisions at once, or within less than twelve months, primarily for the same reasons, the anticipated revenues are added together. Specific Direction 22 has no equivalent.
Decisions below the threshold remain visible to the PSR. Annex 3 to Specific Direction 23 requires the annual overview to list every acquirer fee decision, and for those below the threshold to report the actual UK revenue the fee generated in its first full financial year. What falls away is the reasoned record and the pricing-principle analysis, not the disclosure of the decision itself. On the information side, the PSR states in PS26/1 that both schemes must deliver the same outcomes for acquirers, while Annex 1 permits a standardised format rather than requiring one. The three-month and six-month letters in the table above will determine where within that range each scheme settles.
Effect on acquirers and merchants
Acquirers are the direct beneficiaries, because they are the schemes’ customers and the parties the directions bind the schemes towards. Merchants sit one step downstream and take the benefit through their acquiring contracts, which is the transmission mechanism the PSR relies on in its market review and in the cost benefit analysis. Six months’ notice of a new or changed fee, carrying for a modified fee the previous level, the calculation logic or the trigger conditions, allows an acquirer to model the cost and to renegotiate merchant pricing before the fee takes effect. For behavioural fees, the schemes have to supply on request the information an acquirer needs to assess the financial impact and the steps available to avoid it, informed by that acquirer’s own transaction records for the twelve months before the fee was approved so far as the scheme holds them, and available at least three months ahead.
The consultative stage runs first. Each scheme has to write to its acquirers by 30 October 2026 setting out how it proposes to comply and seeking their views, then write again by 30 January 2027 summarising the feedback, giving its overall view of the points made and confirming the timetable for further change. The direction sets no deadline for acquirers and the response is collective rather than to each firm. An acquirer seeking its billing data in a particular format, or a fee re-categorised, has that single stage in which to put the point in writing and have it recorded.
Regulatory financial reporting and the transfer to the FCA
The third remedy is not yet in force. In CP26/1, published in May 2026, the PSR set out its decision to implement a regulatory financial reporting remedy and consulted on a proposed direction and draft regulatory accounting guidelines. The consultation closed on 3 July 2026. Each scheme would prepare regulatory financial statements for its UK card business, including a profit and loss account, assured internally by the scheme’s European management and externally by an independent auditor, and reconciled to the group’s Form 10-K filings. The remedy addresses the PSR’s conclusion in the market review that the data available did not allow firm conclusions on the schemes’ UK profitability; its estimates of Mastercard’s EBIT margin ranged up to 54 per cent and of Visa’s up to 64 per cent.
Substantive compliance with Specific Direction 22 falls due in July 2027, the first pricing governance filings in late 2027 and early 2028, and the first regulatory financial statements later still. The PSR records in PS26/1 that the Government intends to abolish it and consolidate its functions within the FCA, that it expects the FCA in due course to take over responsibility for monitoring and evaluating these remedies, and that it will review the interventions in line with the FCA rule review framework. The Financial Services and Markets Bill 2026 is the legislative vehicle, and the consolidation timetable runs alongside the compliance dates in the table above. The substantive obligations on Mastercard and Visa are unaffected by the institutional change.
Frequently asked questions
When do Specific Directions 22 and 23 take effect?
Both came into force on 30 July 2026. Specific Direction 23 requires pricing governance compliance processes by 30 November 2026, so fee decisions taken from that date need a signed record. Specific Direction 22 defers its substantive information requirements, in section 3 and Annexes 1 and 2, to 30 July 2027, twelve months after commencement.
What power did the PSR use?
Section 54 of the Financial Services (Banking Reform) Act 2013, which lets the PSR give directions to participants in regulated payment systems. Because these apply to specified persons under section 54(3)(c) rather than generally, they are specific directions, and section 62 required the PSR to consider whether it would be more appropriate to proceed under the Competition Act 1998, and to refrain if it thought so. Each direction records that the PSR had regard to section 62.
Did the PSR cap card scheme fees?
No. The PSR consulted on four remedies in April 2025, adopted two of them, did not pursue the publication of schemes’ information remedy, and continued work on regulatory financial reporting. No price control formed part of the package. The two directions given on 30 July 2026 govern what the schemes tell acquirers and how they document pricing decisions, not what they charge.
Do the directions affect the Interchange Fee Regulation separation requirement?
No. Both directions preserve Article 7 of the Interchange Fee Regulation, as retained in UK law, and the associated technical standards. Where a scheme determines that compliance with those requirements calls for it, it may maintain separate compliance policies and processes for its scheme activities and its processing activities, and must file separate compliance reports. Under Specific Direction 23 the separation extends to separate senior managers and executive managers. The PSR annual plan for 2026/27 sets out where this work sits in the wider programme.
