The UK government has launched consultation on new rules to cap fees charged by banks to their business customers for processing credit and debit card payments.

The rules form part of the Interchange Fee Regulation announced by the European Union (EU) earlier in 2015, and will be effective from 9 December 2015.

They aim to bring in an EU-wide cap on the charges paid by a business when a customer makes a card payment.

Under the new rules, these charges will be capped at 0.30% for credit cards and 0.20% for debit cards.

According to estimates from the British Retail Consortium, the agreement could reap annual savings of up to £480m for British businesses.

Additionally, the EU is also close to finalising a revision of the Payment Services Directive (PSDII).

The amended PSDII is expected to prevent businesses from making money from customers, who pay by card, by capping or banning the practice completely, based on the type of card.

Chancellor of the Exchequer George Osborne said: "Ensuring the EU has a competitive financial services industry that works in the interests of consumers and supports the wider economy is a key pillar of our reform agenda.

"That’s why we are determined to tackle the unfair fees that Britain’s businesses are often charged when their customers pay by card – fees which are often passed on to consumers."