'Nail in the coffin for free banking': Debit and credit card users could face increased charges under EU plans

• Expected to limit or cut fees which retailers pay banks for card transactions
• Banks could reportedly lose up to 34p for each transaction
• It is feared banks will rebalance losses by increasing card charges

Debit and credit card users could face increased charges under EU plans expected to be outlined later this month

Debit and credit card users could face increased charges under EU plans expected to be outlined later this month, it has today been claimed.
It is feared the move could signal the end of free banking.
It comes as it has been reported customers could also be charged for using cash machines and their account as banks try to claw back a £2.4billion loss.
The plans, due to be announced by the European Commission this month, are expected to either limit or cut completely the fees which retailers have to pay banks for each card transaction.
The Express reports banks could lose up to 34p a time.
Richard Wagner, chief executive of Advanced Payment Solutions told the paper there was 'no doubt' the losses will be passed on the customer.
It is feared consumers could have to pay a minimum of £25 a year to use a credit card and £11 a year for a debit card, according to a report from Europe Economics with Mastercard.
The report warned that customers 'lost out' when similar changes to interchange fees were introduced in Australia in 2003 and Spain in 2005.
The retailers did not pass their savings on.
As a result banks and card issuers rebalanced losses by increasing credit and debit card charges, it has been reported.

 

Mr Wagner warned banks were likely to use similar 'creative' means to claw back losses, including through charging higher fees for using cards.

The plans, due to be outlined by the European Commission this month, are expected to either limit or cut completely the fees which retailers have to pay banks for each card transaction. It is feared banks will then pass this cost onto consumers

He warned that free banking 'is under threat'.
He added: 'The current system is relatively fair. If that changes it be the nail in the coffin of free banking.'
Europe Economics spokesman Dr Andrew Lilico told the paper that he believed a White Paper later this month would outline plans to scrap or cap interchange fees.
He added: 'It is also plausible that in the UK it could lead to charges being brought in for bank accounts which are currently free.'
Damon Gibbons, director of the Centre for Responsible Credit, said British consumers used their cards more than anywhere else in Europe and so were 'particularly vulnerable.'