Consumers face €100m in additional credit and debit card fees

Wednesday 20 November 2013 18.03
New study on credit card fees carried out by economist Tony Foley
New study on credit card fees carried out by economist Tony Foley

A new study has found that proposed new EU regulations could result in Irish consumers paying over €100m in additional credit and debit card fees every year.

The study was carried out by economist Tony Foley on behalf of MasterCard.

Earlier this year, the EU Commission published a series of proposals to reduce the contribution merchants make to funding the cost of card payments.

The move would affect payment deals made by over 90% of cards issued by banks in Ireland.

The report also warns that the proposals would have a negative impact on Government's efforts to increase the use of secure electronic payment methods here as identified by the National Payments Plan.

They may also result in reduced investment in innovation across the country's payments system, hindering cost competitiveness and efficiencies for businesses, especially SMEs.

"The current EU intention to reduce interchange fees is clearly inappropriate for current and near future Irish economic and banking circumstances," commented Tony Foley. 

"The Government should not support the proposed regulation without first undertaking a comprehensive analysis of the possible consequences on consumers, bank revenue and the wider economy," he cautioned. 

He pointed out that Ireland continues to lag significantly behind the rest of Europe on electronic payments, with consumers withdrawing the highest amount of cash from ATMs in the EU and using cheques at over double the EU average. 

By the end of 2012, there were 4 million debit cards and 2.1 million credit cards in Ireland, with 356 million purchases made annually at a value of over €24.3 billion.