Permanent TSB is to lift the limit on the number of card transactions that will qualify for a 10 cent payment under its Explore Current Account every month.
Until now, customers could receive 10 cents for the first 50 purchases, including contactless, that were made using the account's card each month.
However, PTSB has now removed that limit for the 120,000 users of the account during April and May.
The bank said the decision is a response to the Covid-19 crisis and aims to encourage customers to use their card to pay in order to reduce the use of cash which maybe spread the virus.
"The Covid-19 pandemic is a national emergency and we want to encourage our customers to use their card, and go contactless where possible, to help slow the spread of the virus," said Jeff Harbourne, Head of Savings and Personal Banking with Permanent TSB.
"Because the Explore Current Account is built around the concept of rewarding customers, it gives us great flexibility to do just that - reward our customers when they need it most," he said.
The initiative launches at the start of April and will run up to the end of May.
During last November and December, Explore Current Account customers made almost 6 million card payments.
Banks are currently working to increase the limit on contactless transactions from €30 to €50 in order to encourage greater use of card payments.
AIB also recently announced that it would defer plans to introduce a 1 cent charge on contactless payments until after the Covid-19 crisis.
Bank of Ireland has also waived its fees on purchases using contactless until after the emergency is over.