Credit and debit card fees to be cappedAugust 24, 2015 // No Comments
The Government has launched a consultation on new rules to cap fees charged by banks to their business customers for processing credit and debit card payments.
These new rules, which are part of the Interchange Fee Regulation that the European Union (EU) agreed earlier this year, introduce an EU-wide cap on the charges paid by a business when a customer pays for something using a card. From 9 December 2015 the fees banks can charge will be capped at 0.30% and 0.20% for credit and debit card transactions respectively.
There were almost 10.7 billion credit and debit transactions in Britain in 2013, and the British Retail Consortium has estimated that the agreement could save British businesses up to £480 million a year. The government would like to see this benefit passed on to consumers in the form of lower prices.
Separately, the EU is also close to finalising a revision of the Payment Services Directive (PSDII), to prevent businesses from making money from customers who choose to pay by card by capping or banning the practice completely (depending on the type of card).