Personal Finance

Thursday 21 August 2014

Debit card charges to rise as Laser checks out

Charlie Weston, Personal Finance Editor

Published 01/03/2014 | 02:30

  • Share
Tara Buckley, Director General of RGDATA
Tara Buckley, Director General of RGDATA

CONSUMERS have been warned that banks are set to impose higher charges on them for using debit cards after the Laser system was shut down.

  • Share
  • Go To

The Laser card system ended last night after banks replaced the payment cards with Visa and MasterCard debit cards.

But retailers said the new debit-card system was more expensive for them when processing payments and warned that this would eventually lead to higher prices in shops.

The debit cards issued by AIB and Bank of Ireland have a feature that allows them to be used for contactless payments. This involves waving the card in front of a terminal and not entering the personal identification number (PIN) for purchases of less than €15.

Banks are not charging at the moment for contactless payments. But the Consumers Association warned people that banks were attempting to get people "hooked" on the new contactless payment method before introducing fees.

Dermott Jewell of the consumer body said: "Consumers need to be careful because there is no question that banks are trying to get people hooked on contactless payments before charging them." Bank of Ireland admitted yesterday it had received regulatory approval to impose charges for contactless payments on its new Visa contactless debit cards, but has not yet decided to apply the charge.

In the past, the bank said it would charge its card holders 15c per transaction on its Visa debit cards from the end of the year. AIB said: "The account transaction fee of 20c is being waived for all contactless transactions from launch until 28 November 2014."

Head of RGDATA retail lobby group, Tara Buckley said the replacement of Laser cards by Visa and MasterCard debit meant the charges imposed on shop owners for processing payments had shot up by 50pc.

Under the Laser system, it cost 8c per transaction for retailers to have payments processed by merchant bank processors.

RETAILERS

But with debit cards, the retailer pays between between 11c and 20c per transaction.

The group that represents 4,000 shops said most consumers were already paying for using debit cards for non-contactless payments through bank charges. "Banks are making on the double here," she said.

Laser cards have been in use in this country for almost two decades. They have been replaced because the cards are sometimes not accepted when consumers want to use an internet site from outside of Ireland to buy clothes, DVDs or purchase tickets.

Irish Independent

Read More

Editors Choice

Also in Business