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EU unveils plan to boost retail by cutting inter-bank credit card fees

EU unveils plan to boost retail by cutting inter-bank credit card fees
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The European Union has laid out its proposals for reducing the fees paid by credit cards to banks, which could lead to lower prices for consumers.

Credit card transactions fees can be as much as three times the amount for debit cards. In addition, the two charges differ between countries.

There is no charge for debit card fees in Denmark, however in Poland the rate is 1.6 percent.

Credit card transactions are subject to 0.5 percent in France, with this fee rising in Germany to 1.8 percent.

Under the EU’s proposals, debit card fees will be capped at 0.2 percent and credit cards at 0.3 percent.

The plan is an effort to boost the retail sector across Europe.

“We have seen that interbank fees do not correspond to real costs for big companies such as Mastercard and Visa. Besides, in many countries where those fees are regulated or limited, it’s less expensive to make payments with cards, for the retailer as well as the consumer,” explained the European Commissioner responsible for internal market and services, Michel Barnier.

The move is meant to make it easier for European customers to make purchases across national borders.

The proposal is expected to face heavy opposition from the financial services industry and there are warnings that card companies may start charging annual fees to make up for the lost revenue.