Banks' credit and debit card processing fees to be capped
Fees charged by banks to businesses for processing credit and debit card payments are to be capped under new Government proposals that Chancellor George Osborne said should mean lower prices for consumers.
It is estimated that the rules could save UK firms up to £480 million a year.
The Treasury said it was consulting on the proposals which are part of regulations agreed by the European Union earlier this year introducing an EU-wide cap on charges paid by retailers when a customer uses a card for a transaction.
They should mean that from December 9 these fees will be limited to 0.3% for credit cards and 0.2% for credit cards.
%VIRTUAL-ArticleSidebar-credit-cards%
Under the EU regulations, the Government could impose lower caps than these but it has opted for those at the default level set by the agreement.
Mr Osborne said: "Ensuring the EU has a competitive financial services industry that works in the interests of consumers and supports the wider economy is a key pillar of our reform agenda.
"That's why we are determined to tackle the unfair fees that Britain's businesses are often charged when their customers pay by card – fees which are often passed on to consumers.
"And that's why I am delighted that we reached an EU agreement to reduce the fees that banks can charge businesses for processing card transactions. I expect businesses to pass on these savings to consumers in the form of lower prices."
The Treasury said there were almost 10.7 billion credit and debit transactions in Britain in 2013, and that the British Retail Consortium (BRC) had estimated the agreement could save British businesses up to £480 million a year.
It said the agreement secured on interchange fee regulation "demonstrates how Europe can ensure that businesses and consumers alike benefit from the single market".
More on AOL Money:
Stealing from contactless payment cards is 'easy'
The EU says Mastercard is overcharging stores
IDS has credit card frozen in spending row
