UK Finance welcomes the opportunity to engage with this first stage of the PSR Market Review into the supply of card-acquiring services, and will continue to do so throughout the course of the Review process.

This first consultation paper concerns fees that retailers pay to acquirers for accepting card payments - known as the Merchant Service Charge (MSC). An element of the MSC is the interchange fee. Interchange fees are paid by acquirers to issuers, via the card scheme operators. Interchange fees are an important component of card payments, ensuring a funding balance in the card ecosystem between card companies and retailers, and playing an important role in assisting with the investment necessary to keep card payments secure, reliable and convenient.