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Chancellor George Osborne recently announced new Government proposals to cap processing fees charged by banks and it is estimated that the rules could save UK businesses up to £480m a year.
HM Treasury said it was consulting on the proposals which form part of European Union regulations agreed earlier this year.
The proposed cap would mean that fees will be limited to 0.3% for credit cards and 0.2% for debit cards.
Although the regulations allow the Government to impose lower caps, it has opted to set them at the default levels set out in 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.”
According to the Treasury, there we almost 10.7 billion credit and debit card transactions made in Britain in 2013.
The British Retail Consortium (BRC) estimates the agreement could save UK businesses up to £480m a year. It said that the agreement, secured on interchange fee regulation, “demonstrates how Europe can ensure that businesses and consumers alike benefit from the single market”.