The Association of Convenience Stores (ACS) has welcomed the introduction of a cap on the fees that banks charge retailers for accepting debit and credit cards.

The new rules state that interchange fees will be capped at 0.3% for credit card transactions and 0.2% on debit card transactions.

ACS chief executive James Lowman said: “We are pleased that these limits will now be applied to card transactions as we argued strongly in the EU and at the Treasury that limits were required.

“Around one in five convenience store customers currently pay by card, with contactless payments also growing significantly over the last year, so placing a cap on retailers’ costs for processing these transactions is necessary for convenience stores.”

The new cap on interchange fees is expected to save retailers approximately £480m a year.

Under the previous regulations, typical interchange fees ranged from around 8p to 11p per debit card transaction and between 0.77% and 1.5% of the transaction value for consumer credit cards.