The British Retail Consortium has said that EU businesses could save £480 million as a result of the new caps on credit and debit card fees, which came into force on 9 December 2015.

The new rules in the UK will reduce credit card fees to 0.3% and 0.2% of the value of the transaction for debit cards. The fees will be charged to retailers for using the electronic payment systems

According to the European Commission, interchange fees amount to GBP 1 billion per year in the UK.

The fee caps are designed to push down prices for consumers but the BRC is concerned that consumers will end up paying for card companies' loss of revenue in other ways, such as cuts to reward schemes.

Helen Dickinson, BRC chief executive, said: “The implementation of card fee caps is long awaited and welcome but the choice of a ‘weighted average' for debit card fee cap is not the best approach. It will deprive consumers of improved services or even more competitive prices, as UK retailers are prevented from realising the full potential savings from this long-awaited legislation.”

The BRC is pushing for an even lower debit card cap as soon as possible.

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CTMFile take: This is good news for retail businesses in the UK - indeed for all corporates that accept card payments from consumers. It signals a further push into a cashless economy, making it more cost effective to accept debit and credit card payments.