A revised EU Payment Services Directive is promising to slash the charges that UK retailers pay when processing credit and debit card payments as it seeks to standardise transaction fees across Europe.

UK businesses are currently being charged transaction fees at double the rate of comparable businesses throughout the rest of Europe, card processing services company Annecto UK Ltd said.

The revised directive, known as PSD2, will cap these fees and require the same percentage to be used across the EU, a move which could see the charges for UK retailers slashed by as much as 50%.

The directive will also ban surcharges from being placed on debit and credit card payments - a common practice for the airline industry.

“When interchange fees are capped for consumer cards, retailers’ costs for card transactions will be substantially reduced and surcharging will no longer be justified,” the directive states.

Caps have been proposed at 0.2% of the value of the transaction for debit cards and 0.3% for credit cards.

The directive is expected to be ratified shortly but it is not likely to be enforced before 2016.