€10m hit for shoppers in switch to Visa
SHOPPERS will be hit for €10m because of the switchover from Laser to Visa cards, according to international payments experts.
Retailers said the move from Laser to Visa debit cards would mean an average rise in the cost of card transactions of 40pc -- and this would be passed on to consumers.
Ulster Bank and Permanent TSB have switched from using Laser debit cards to issuing their customers with Visa debit cards. These new debit cards work the same as the old Lasers, with consumers only able to spend money if they have funds in their current account.
Banks have been ditching Laser because some international retailers, particularly those online, do not accept Laser cards.
Bank of Ireland also began replacing Laser cards with Visa debit this year, with AIB set to begin the switch to Visa by the summer.
But British payments consultancy group CMS Payments Intelligence said the cost of retailers accepting payments by Visa would amount to €10m this year. Brendan Doyle of CMS said: "The cost to Ireland's merchants to accept these new cards is double that of Laser cards."
Visa has reduced the fees it charges for handling some smaller value card transactions, but banks are unlikely to pass on these reductions to retailers.
David Fitzsimons of Retail Excellence said there was a perception among retailers that the withdrawal of Laser was creating a monopoly for Visa.
He said the switch from Laser to Visa debit cards would mean the costs for retailers would shoot up from 8c to €1 on a €100 transaction.
Mr Fitzsimons said some of the cost was being imposed by banks that process the payments. But the majority of cost was what is called the interchange fee, which is imposed by Visa.
But a spokesman for Visa denied that it was piling on higher costs on retailers.
It insisted the interchange rate for Visa debit in Ireland was a flat fee, which was approved by the European Commission. The spokesman said the fees were not retained by Visa Europe, but instead went to the banks that issue the Visa cards.