The future of debit and credit cards will be put at risk today as EU proposals to change the way the card payments system is funded are debated in Brussels. The card payments industry is asking the Government to take action to protect the 47 million British cardholders from proposals which aim to reduce retailers’ contributions to the system, potentially leaving consumers to pick up the bill.

The proposed changes would place a cap on the “interchange fee” – paid by retailers on card transactions as their contribution to the card payments system which provides them with benefits such as guaranteed payments and security from fraud. The reduced income from retailers will mean that the substantial costs of providing cards, and the systems which enable customers to pay for things safely and speedily, will have to be funded in other ways.

The implications would be particularly hard-felt by the British economy as the UK accounts for over 30% of all EU card spending, and more than 70% of EU credit cards are held by British consumers. Spending on debit and credit cards in the UK accounts for a third of our national GDP – £532 billion in 2013 across 10.9 billion transactions.

The EU proposals will impact card payments, which British consumers have long enjoyed the benefits of since the first credit card was introduced to the UK in 1966. These proposals will affect the system which: