This should spell good news for shop prices. Fees charged to retailers in the European Economic Area will fall by an average of 40% on payments made on Mastercard, Maestro, Visa, Visa Electron and V-PAY credit and debit cards issued elsewhere, which should be reflected in lower costs for consumers.

Each time a consumer uses a debit or credit card to pay, the retailer’s bank pays a ‘multilateral interchange fee’ to the cardholder’s bank. The fee is passed to the retailer, who then passes the cost to the consumer. This is reflected in higher prices across the board, even for those not paying by card.

The EU has now accepted a proposal made in December by Visa and Mastercard for a 0.2% fee on non-EU debit card payments in shops and a 0.3% fee on credit card payments. Online purchases will continue to attract higher fees to reflect higher risks. They will be charged a maximum of 1.15% of the transaction value for debit cards and 1.50% for credit cards. These changes bring fees into line with those charged for EU cards.

Margrethe Vestager, the competition commissioner, said: “This, together with our January 2019 decision on Mastercard’s cross-border card payment services, will lead to lower prices for European retailers to do business, ultimately to the benefit of all consumers.”