Their latest plan could soon have bank customers having to pay up to £25 a year just to use their debit and credit cards. The reason for this? In their usual little thought through infinite wisdom, the powers that be in Europe have just published a plan to limit the amount that banks charge retailers for transactions - a move sure to please them, but leave their customers seething.
What are known as 'interchange fees' imposed by card issuers, to cover the cost of the processes of card payment and fraud protection, cost retailers £billions every year - in the region of 10p per debit card transaction, but much more for credit card transactions - the reason why major retailers such as travel agents often levy a surcharge to their customers when using a credit card to pay for a sometimes already heavily discounted item. The Commission says that fees are currently too high, and has proposed a maximum charge of 0.2% on debit card transactions, and 0.3% on credit card transactions.
This will save retailers around £2 billion annually, which could be passed on to customers by way of lower prices, (:-) seriously?), but guess who is likely to pick up the tab for the costs of running the system? Research conducted by one of the major card providers suggests that the customer would be charged up to £11 annually to use their debit card, and £25 for their credit card if the legislation goes through.
Britain's consumers currently hold over 56 million credit cards, and over 88 million debit cards, making the possible additional charges to use them around £2.5 billion annually. Of course, a change such as this would affect every EU member country, but the change would be felt the most in good old Blighty, (no surprise there then), because we are used to free banking.
Time to get the biscuit tins out again! (For those not old enough to remember - to store cash under the bed).