RGDATA welcomes Noonan’s debit card revisions
A new 12c tax on ATM transactions is set to come in to force on January 1st, while in-store debit card fees will be slashed in half
Print15 October 2015
Some time ago, we reported on an RGDATA survey that found retailers across Ireland are being crippled by banking charges that eat in to their revenue in a massive way. The government appears to be tackling this issue with a series of measures aimed at reducing the amount of cash in circulation and instead encourage the public to use debit cards for more transactions.
A new ATM tax is set to be introduced on January 1st, whereby all ATM transactions will incur a government levy of 12c. The tax will be limited to €2.50 for ATM cards and €5 for combination ATM / debit cards. In short, consumers will not pay MORE tax on ATM fees, but they can reduce this amount or eliminate it altogether by using their debit card for more transactions. Under the new initiative, there will be no levy on in-store debit card transactions, while the charge to retailers for such transactions, known as interchange fees, will be slashed.
The objective of these changes, according to finance minister Michael Noonan in his Budget 2016 speech, is to bring an end to minimum transaction amounts in stores and also to ease the pressure on retailers in charges for transactions and also for cash lodgement fees.
Meanwhile, the limit for ‘contactless’ payments by debit card has also been increased from €15 to €30.
These new arrangements will come in to play on 9 December.
Tara Buckley, director of RGDATA, welcomed the measures by pointing out it was part of her organisation’s pre-budget submission to the Minister. “We are delighted that the department of finance agreed with us and moved to keep the fees as low as possible,” Buckley told ShelfLife. “The measures make it more attractive for retailers to accept card payments and also for shoppers to use less cash.
“However, it remains to be seen if the cap on fees delivers with regard to specific savings for convenience retailers,” she added. “For many, payment services are loss-making, so any improvement on that will be most welcome. We will be monitoring the impact, but it is very welcome to see the Minister intervening on the hidden costs of using cards.”
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