Who Regulates Credit Card Merchant Services in UK?
Because of how customers are making purchases these days, the need to use one of the merchant services providing credit card transactions in the United Kingdom is essential to the success of any business. This is especially true if a business is offering the products or services over the Internet, where the only real way to process financial transactions is true one of these merchant services.
As the Internet has exploded so has the need for merchant services, and this is why it has become an ever-expanding business that has needed regulation to ensure that transactions and business practices are being conducted in a legal and ethical way.
How Regulation of Merchant Services Originated
The UK clearing payment system was actually created by the commercial institutions themselves. There is no specific governmental legislation or regulation that governs this industry, but has been created through the clearing companies themselves.
The Association for Payment Clearing Services (APACS) is the institution that all settlement members are a part of, and are authorized to perform credit transactions as a result of being part of this institution. This organization began in the United Kingdom in 2000 and has worked with the Banking Consolidation Directive to provide a means by which transactions can be monitored and regulated.
The Legislation Used to Support the Industry
While there is no specific legislation that governs merchant services, there have been prior laws that have been passed that have been implemented by the APACS as part of the regulation of this industry. These include the Bills of Exchange Act 1882, the Cheques Act of 1957 and 1992 and the Deregulation Order of 1996.
All of these laws became the basis for the lot related to specific payment systems that were created in 1998, known as the Competition Act. All transactions recorded by the clearing system and conducted by the membership must meet the provisions of this act in order to be approved. This also includes approval by any laws related to merchant services created by the European Union.
In the year 2000, the British government created a publication known as the Competition in Payment Systems which proposed a series of new powers given to the Director General of Fair Trading to ensure that there is fair and effective competition within the payment system that is beneficial for both consumers and businesses. As part of this legislation, the Office of Fair Trading set up a specific office that is to administer over any issues related to this industry.
The one challenge related to credit card merchant services has been to properly adhere to EU guidelines in this area. Cross-border payments, especially those that will be transposed into euros, must meet the 1999 Cross-Border Credit Transfers Regulations, which handles all transactions across border boundaries, both in and out of the country.
The Role of the Bank of England
The Bank of England is responsible for the oversight of all payment systems. While they do not currently have their own interbank payment network, their system is able to operate in real time, ensuring that transactions are properly implemented according to the guidelines. Aside from that, click here to know more about merchant services in the UK.
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