The PSR Directed Visa and Mastercard on Scheme Fees — and It Is Not a Price Cap

In July 2026 the UK's Payment Systems Regulator closed a market review that had run for years, and gave Mastercard and Visa two binding directions about how they charge acquirers.

The most useful thing to establish first is what it did not do.

It is not a price cap

Nothing in either direction caps a fee, requires a reduction, or creates a right to challenge a specific price.

That is worth saying plainly because a regulator concluding a fee investigation invites the assumption that prices are coming down. The PSR's own findings are pointed — it found that scheme and processing fee revenues "rose very substantially in recent years", that the "value-based" pricing the schemes describe "is not an outcome of competition" but "only reflects customers' willingness to pay", and that its analysis of a specific set of fee changes "found very limited evidence that the schemes based new fees on cost changes."

It then remedied the information, not the price. If your 2027 cost model assumes scheme fees fall because of this, the directions do not support that.

One disambiguation before going further. Everything here is the PSR's PS26/1, on card scheme and processing fees. UK regulators number their policy statements independently, so a reference to "PS26/1" is ambiguous without the issuing body — the FCA operates the same numbering series. Cite the issuer, not just the number.

What was actually issued

Two final specific directions, given to each scheme under section 54(3)(c) of the Financial Services (Banking Reform) Act 2013:

The gap between the dates is deliberate: Pricing Governance runs four months from publication, while ITC gets twelve, reflecting what the PSR calls the more substantial systems and operational changes required.

Note the ordering. The schemes' record-keeping obligation starts first. The information you actually receive changes eight months later.

The ITC direction: what an acquirer gets

The PSR's findings about the current state are specific, and any acquirer will recognise them. It found the information the schemes provide is often not enough to understand behavioural fees — with some acquirers saying it costs them hundreds of thousands of pounds. It found mandatory and optional fees are very complex and insufficiently explained, that acquirers struggle to get timely and adequate responses to clarification requests, and that they have difficulty accessing information through the schemes' online portals.

The direction splits the fix in two.

ITC1 — existing fees. The schemes must provide the minimum information necessary for acquirers to understand the nature of scheme and processing fees and how they are triggered, plus the minimum information that allows acquirers to perform effective reconciliation of their fees in a relevant billing period.

ITC2 — new and modified fees. Two notice periods, and they are different:

• Six months before implementation: the information necessary to understand the new or modified fee and how it is triggered.
• Three months before introduction or change, on request: the information acquirers need to understand the financial impact of new or modified behavioural fees.

The three-month limb is on request. If you want it, someone has to ask.

The change that matters most: fee logic, not transaction identifiers

This is the single most operationally consequential amendment between consultation and final decision.

The PSR had proposed requiring transaction-level identifiers. The final ITC Direction does not. Instead the schemes must provide the relevant "fee logic" — which the PSR defines as sufficient and adequate information that acquirers need to reconcile billed fees in their invoices to the originating transactions.

Read that carefully if you build reconciliation systems. You are not being promised a key that joins a scheme fee line to a transaction record. You are being promised enough explanation of the rule — the PSR specifies that fee logic covers whether and when each fee incurred is triggered and is payable, and if so how much — to work out which transactions triggered a charge.

Whether that is a downgrade depends on your data, and there is a real argument that it is not. The PSR says it refined the requirement to address implementation concerns "while preserving the outcome sought by acquirers", and records an acquirer's view that if the schemes provide fee logic linked to authorisation and clearing data, "it would be very easy for it to replicate the logic in its internal systems because it already holds those data points".

So the honest read is that the shape of the work moved rather than necessarily the amount: you derive the join instead of being handed it, and how tractable that is depends on the fee and on what your own systems already retain. Worth testing against your two or three most opaque behavioural fees before assuming either outcome.

Pricing governance: a principle and a record

The second direction is less visible to acquirers and potentially more consequential over time.

For Acquirer Fee Decisions — defined as decisions to approve a proposal to introduce or change a fee charged to acquirers in respect of UK transactions — each scheme must:

• pay due regard to a defined principle based on service users' interests, the Pricing Decision Principle
• compile and retain an Acquirer Fee Decision Record (AFDR) for each such decision: a clear, contemporaneous record setting out all relevant considerations underpinning it and how it complied with the Pricing Decision Principle
• send the PSR any or all AFDRs on request

The finding behind this is that the schemes "do not consistently record in writing all the factors that decision-makers consider when approving fee changes." The remedy does not tell them what to decide. It requires them to write down why, contemporaneously, and hand it over when asked.

The AFDR is not published and you cannot request one. It goes to the regulator.

The threshold moved, and in the direction that reduces scope

The PSR consulted on £100,000 of annual net revenue and set the final threshold at £250,000 of annual gross revenue. Those are not the same measure and not the same size — both the amount and the basis changed.

But read where the threshold actually applies. It is narrower than a single gate letting through every fee above £250,000. The PSR decided a materiality threshold is appropriate for the ITC2 component — and there, only for mandatory and opt-out optional fees, with behavioural fees excluded from its scope and opt-in optional fees outside ITC2 altogether. It also applies to the Acquirer Fee Decision Record requirement under Pricing Governance.

It does not apply to ITC1. Annex 1 puts it plainly: the threshold applies to ITC2, covering new and changed fees only, but not to ITC1, which covers all existing fees.

That matters more than the number. The limb most likely to help your reconciliation — full information on every existing fee, regardless of size — has no threshold at all. The gate sits on advance notice of new and modified fees, and on the schemes' internal record-keeping.

What the PSR chose not to adopt

Two decisions from December 2025 are worth knowing so you do not wait for something that is not coming.

The publication of schemes' information remedy was not pursued. The transparency arriving is transparency to acquirers and to the regulator, not to the public.

Regulatory Financial Reporting runs on its own track. Its purpose is to give the regulator a reliable ongoing understanding of the schemes' UK profitability. The PSR decided to engage further on it in December 2025, then published a decision to implement it and consulted on a proposed direction in May 2026 — a separate workstream from the two directions here.

There is also a limitation the PSR states about its own findings: it found evidence of Mastercard's and Visa's UK profits "consistent with a finding that their margins are higher than would be expected in competitive markets", but said that given the limitations of the available data it did not consider it could reach firm conclusions on the schemes' UK profitability. That is a regulator declining to assert something it could not evidence, and it is why the RFR remedy exists.

The regulator issuing these directions is being abolished

PS26/1 carries the caveat itself: as part of the Government's plans to consolidate the PSR into the Financial Conduct Authority, references to action the PSR may take in future should be understood as including the FCA pursuant to the consolidating legislation.

So the directions survive the regulator. Expect the name on the correspondence to change, not the obligation. For the wider transition, see authorised push payment fraud on real-time rails, which tracks the same consolidation from the reimbursement side.

What an operator actually does differently

• Correct the internal expectation now. If anyone in your organisation is briefing this as a fee reduction, fix that before a budget is built on it.
• Diary November 2026 and July 2027 separately. The first is the schemes' record-keeping obligation, the second is when your information actually improves.
• Ask for the three-month behavioural-fee impact information. That limb is on request. A process that never asks receives nothing.
• Do not design reconciliation around transaction-level identifiers. They were consulted on and dropped. Design around deriving the join from fee logic, and find out early which of your fee lines that is genuinely hard for.
• Use the six-month window. Advance notice of new and modified fees, with an explanation of how they are triggered, is only useful if something in your pricing process consumes it.
• If you are a merchant, this reaches you through your acquirer or not at all. Nothing here obliges an acquirer to pass anything on. It is a reasonable thing to raise at your next pricing review, and it is not a right.
• Scope check: UK. The Pricing Governance direction is scoped to fees charged to acquirers in respect of UK transactions; the ITC material is expressed in terms of UK acquirers. The two formulations are close but not identical, so if your entity structure or volume mix sits awkwardly across that line, read the directions rather than this article.

The honest summary

The PSR looked at a market where fees rose substantially, competitive constraint was weak, and the schemes could not consistently show why prices changed — and concluded that the fixable problem was information asymmetry rather than the price level itself.

For acquirers that is genuinely useful: fee logic sufficient to reconcile invoices to transactions is a real improvement on the current state, and advance notice of new fees is a real improvement on discovering them. For merchants it is indirect, and for anyone expecting cheaper card acceptance it is not what was decided.

For the fee stack these remedies sit on, see card scheme fees demystified and reading a processing statement line by line.