The British Retail Consortium (BRC) says MasterCard has changed its mind about the new system after pressure from the lobby group and its members.

The card group is introducing a new debit card and had wanted to change the current system, whereby retailers pay a fixed fee when a debit card is used. MasterCard wanted to charge a fixed fee and a percentage of the purchase price when a customer used its debit card.

A BRC spokesman said:

"Higher fees would put the squeeze on retailers and ultimately filter through to customers.

"Card companies' administration costs are no greater for large transactions than small ones so there can be no justification for higher charges."