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European Parliament approves card fee caps

The European Parliament has voted in favour of an EU-wide cap on the fees banks charge retailers to process debit and credit card transactions.

MEPs gave their backing to the proposals, which will limit debit card interchange fees at 0.2% and credit card fees at 0.3%, by 621 votes to 26.

In the UK only credit card fees are charged at a percentage, while debit card transactions cost retailers a flat rate of around 8p per transaction.

The caps will first be applied to cross-border transactions, before being rolled out domestically this autumn.

At the time of the initial proposals in December 2014, the British Retail Consortium said the caps would lead to increased investment in businesses.

BRC director general Helen Dickinson added at the time: “We have long campaigned for a cap on excessive and anti-competitive card payment fees. Once implemented in the UK during the course of 2015 this will enable the retail industry to invest an extra £500m a year in innovation and value for consumers.”

In the UK, credit card fees range from 0.1% to 2.5%, according to the BRC. Retailers across Europe pay €13bn (£9.2bn) in fees.

UK businesses will benefit from a slice of the €6bn (£4.2bn) saving predicted by the European Parliament. There are about 95.7 million debit and 55.4 million credit cards in circulation domestically, according to the UK Cards Association.

 

 

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