The PSR must revert to its original proposals if the RFR remedy is to be effective
Our draft response to the PSR's consultation on the draft direction and guidelines for the Regulatory Financial Reporting (RFR) remedy is below. The following points summarise our response.
- We strongly support for the RFR remedy: The retail sector welcomes the PSR's proposal as an important step towards addressing the information gaps identified during the market review and improving understanding of the card schemes UK profitability.
- The RFR must be a tool for action, not just transparency: The framework must provide the evidence needed to determine whether scheme profitability and fee increases are consistent with effective competition and inform future regulatory intervention where concerns persist.
- The current proposal has been narrowed: Compared with earlier proposals, the Payment Systems Regulator (PSR) has removed balance sheet reporting, ROCE analysis, wider UK business reporting, detailed product and service-level reporting, and acquirer fee reporting. While this may improve proportionality, it reduces the regulator's ability to assess profitability and understand its drivers and inhibits the effectiveness of the remedy.
- Greater granularity and standardisation are needed: Reporting must be sufficiently detailed, comparable and consistent across the card schemes to allow the PSR to identify profitability drivers, monitor trends over time and make meaningful comparisons between the card schemes. We recognise the PSR's proportionality rationale but remain concerned that the reduced level of disaggregation may constrain future analysis.
- Balance sheet and ROCE reporting remain important: These measures would provide a more complete view of economic profitability and help overcome the limitations of relying solely on margin-based analysis. The PSR must retain them as part of the remedy or keep their inclusion under review as the framework develops.
- The remedy must lead to meaningful outcomes: Information gathering alone is unlikely to change scheme behaviour or moderate future fee increases. The success of the RFR framework will be judged by whether it effectively enables the PSR to reach robust conclusions on market outcomes and take action where a lack of competition is not delivering effective results for merchants and other service users.
The deadline for submitting the response is 03rd July. Please provide me with thoughts or comments by close of play 22 June .
