A new EU-wide cap on credit and debit card fees intended to save consumers cash may have unforseen consequences, experts have warned.
The cap on how much credit and debit card companies can charge retailers, which went into effect today, limits fees on credit card payments to 0.30 per cent of the transaction value. Fees on debit card transactions are now not able to exceed 0.20 per cent.
British businesses pay £1bn in so-called interchange fees each year, according to the European Commission, and the British Retail Consortium has estimated that the cap could save UK firms up to £480m in costs each year.
But experts at uSwitch, the price comparison company, have warned that retailers and banks such as Tesco and RBS have already scaled back on customer rewards schemes in response to the policy, with more firms expected to follow suit.