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Regulatory changes in 2015

The coming months will see significant changes in the regulatory environment for payment services. Steven Bisoffi, Senior Manager Card Schemes & Regulation, Lloyds Bank Commercial Card & Acquiring Solutions, explained what the key changes mean for merchants.

“In the year ahead we will see a wholesale change which will impact competition, payment card data security, funds settlement, pricing and regulatory responsibility in the payment services industry. In terms of the scope of these changes, there are three areas which will have significant and direct bearing on our merchants:

Faster Payments

At present, the vast majority of merchants receive settlement through the BACS payment system, with a three to five day period between the card transaction taking place and receipt of funds. New proposals outlined by HM Treasury will see merchant acquirers being able to offer speedier settlement to their customers, including using the Faster Payments Service (FPS) as a settlement option. Lloyds Bank Cardnet is now able to support speedier settlement, including Faster Payments from February 2015.


Interchange is a fee which forms a substantial part of the merchant service fee for card acceptance. All merchants pay this fee and it is generally charged either as part of a blended fee or broken out with the other relevant fees for card acceptance. The European Commission has set out plans to regulate interchange fees across member states. This regulation would supersede any current fee, and will lead to greater consistency and transparency for merchants. The European Commission is now finalising the proposed regulation, with a likely implementation of the new rates for Credit and Debit transactions in 2015. The international card schemes will also be introducing new rates in 2015.

Payment Systems Regulator

The Payment Systems Regulator (PSR) will come into force on 1st April 2015. The aims of the PSR are:

  • to promote effective competition in the markets for payment systems and the services they provide.
  • to promote innovation in payment systems.
  • to ensure payment systems are operated and developed in the interests of service users.

Operating as part of the Financial Conduct Authority (FCA), the PSR will consolidate regulation for the payment services industry, which currently falls across the Bank of England, FCA, HM Treasury and the card schemes themselves. In addition to these three main changes, we will also see the impact of:

  1. Announcements from the Competition and Markets Authority that will affect card payments.
  2. Reform of the EU rules on data protection.
  3. Moves by the European Central Bank to improve the security of e-Payments.

Providing updates

At Cardnet we undertake rigorous analysis to assess the potential impact of all regulatory changes on our customers. We commit to keeping businesses informed of the changes that will affect them and ensure that we provide any solutions necessary to help customers benefit from these changes. We also lobby regulators on behalf of our customers to ensure changes are necessary and transparent.”

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