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EU plans to cut credit card fees

Retailers may pass the savings on to their credit card customers.

More from Spending Money
19 July 2013

EU plans to cut credit card fees

The European Commission (EC) is set to consider plans that will see the multilateral interchange fees (MIFs) banks charge on debit and credit card transactions capped.

Richard Braham, head of payments at the British Retail Consortium (BRC), welcomed the proposal, describing it to BBC News as "massively positive".

Currently, retailers must pay approximately 0.9 percent of credit card transactions to the bank processing the payment.

Under the new plans, this charge would be capped at 0.3 percent, resulting in huge savings for sellers.

However, lobbyists for the change argue that it would benefit consumers too, saying some companies pass on the fees to their customers.

Retailers are said to compensate for the expense, which generates an estimated £1.2 billion for banks annually, according to the BBC, through higher prices or card transaction charges.

European Voice quotes Beuc spokesperson Johannes Kleis as saying: "MIFs make products more expensive for consumers, even when payments are not being made by card."

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