Labour MEPs have voted for a cap on credit and debit card transaction fees, which will save British business an estimated £480 million a year.
Every time a credit or debit card is used in a shop, the shopkeeper is being charged for the privilege. Her bank charges your bank for the cost of processing the payment, and the whole thing is administered by the card scheme (the likes of Visa and Mastercard), who pass the cost straight back to the shopkeeper. If the shopkeeper wants to offer people the option of paying by card, then she has to pay.
These charges are immensely frustrating for two reasons: the shopkeeper has no bargaining power to bring them down, charges are completely invisible to shoppers. All of this is about to change: there will be a new European law that will cap these fees for good. For debit cards, this cap will be at 0.2% of the overall value of the transaction, and for credit cards it will be 0.3%.
When you think that, right now, British shopkeepers are having to pay up to six times that amount in order to process credit card transactions, then the difference this will make is huge. In fact, the new rules are expected to benefit British business by a staggering £480 million a year. Those savings will go directly to shopkeepers and retailers, who in turn can pass them on to you, the consumer.
This is a great example of the kind of impact that action at a European level can have. Technology can make the world easier, in lots of ways: you can take a small piece of plastic with you on holiday and take money out of a Spanish ATM or pay for dinner in an Italian restaurant. But it can make the world less transparent as well, if we are not careful, as we are not told how that technology works and whether it is working in our interest.
Labour MEPs have voted to bring down the cost of doing business, and made shoppers' lives a little clearer, a little fairer and a lot cheaper.