Europe to propose bank card fees cap of 0.2%

The European Commission will propose capping the fees that banks charge to process card payments, imposing a limit of 0.2% on debit card transactions and on credit cards, according to draft legislation.

The proposal stops short of an outright ban on the fees banks charge for processing transactions but it will nonetheless ensure that this cost, which ultimately falls on the card-holder and consumer, is permanently curtailed.

The cap, compared by some European Union officials with the cap on mobile phone roaming fees, will have far-reaching consequences, with such payments accounting for a total value of purchases of €1.8 trillion in the wider European economic area in 2010.