Price cap on bank interchange fees is lawful—R (Mastercard Europe SA) v Payment Systems Regulator)
Public Law analysis: The Financial Services (Banking Reform) Act 2013 (FS(BR)A 2013) confers powers on the Payment Systems Regulator to issue general directions to operators of payment systems in the banking industry. The claimants, including two operators of payment systems, had agreed interchange fees which are payable when banks settle a card transaction involving a customer and a merchant. The Payment Systems Regulator issued a general direction under FS(BR)A 2013, s 54 setting a price cap on certain interchange fees which are incurred in some payment transactions. The claimants challenged the lawfulness of the price cap in judicial review, arguing that s 54 did not authorize it. The court dismissed the claim, concluding that the language and purpose of s 54 when understood in the context of the Act as a whole meant that the direction was lawful. Written by Denis Edwards, barrister, Temple Tax Chambers.