11/03/2015 13:01 GMT | Updated 11/05/2015 06:59 BST

€730 Million a Year: Consumers to Benefit From Cap on Card Payment Fees

Consumers can look forward to estimated savings of €730 million a year under new EU rules on card payment fees. Legislation approved 10 March by the European Parliament will set caps for card payment fees that banks can charge retailers when a purchase is made via a debit or credit card. As retailers in turn usually pass on the fees to the customer, the new ceilings should lead to lower prices for goods and services.

"It should enhance fee transparency, stimulate competition and enable both retailers and users to choose the card schemes that offer them the best terms," said Spanish MEP Pablo Zalba, who steered the proposal through Parliament.

For cross-border debit card transactions, the agreed fee cap is 0.2% of the transaction value. For domestic debit card transactions, at Parliament's request, the same 0.2% cap will apply after a five-year transition period in which EU member states may cap fees at 0.2% of the "annual weighted average transaction value of all domestic transactions within the card scheme". For smaller domestic debit card transactions, member states may set a maximum fixed fee of €0.05 per transaction, after the five-year transition period. For credit card transactions, fees will be capped at 0.3% of the transaction value and member states may set a lower fee cap for domestic credit card transactions.

In 2013 non-cash payments were worth €100 billion, with card payments accounting for 42.5%. Some 760 million payment cards were used, about 1.5 for everyone living in the EU;

The regulation on card payment fees is part of a legislative package that also includes a new payment services directive.

The new rules still have to be approved by the Council before they can enter into force.

Copyright infographic European Parliament