From Laser to loser as Visa takes lead in debit payments
CASH is no longer king for consumers who are switching to plastic cards in increasing numbers.
Using a debit card is now the most popular way to pay for something, with an extra 330,000 of them issued last year alone.
With a debit card you can only spend what you have in your current account.
Banks are replacing the older Laser cards with new Visa debit cards, but there were warnings yesterday that the new cards could prove more expensive for retailers and consumers.
The Irish Payment Services Organisation (IPSO) urged retailers to bargain hard for a better deal from banks which process payments on Visa debit cards, as new cards to replace Lasers are rooted out.
The charges for retailers of having card payments processed by merchant banks have jumped by up to 5,000pc, with fears the costs will be passed on to consumers in the form of higher prices.
IPSO, which operates the old Laser system, said retailers now have a choice of up to five merchant banks that can process Visa debit payments.
Una Dillon of IPSO warned: "Retailers need to get together and talk to the different merchant banks. Consumers should not feel the brunt of any increased fees. It is up to the retailers to shop around for a better deal."
IPSO charges just 15c for processing payments made with the Laser card.
But the merchant banks that process payments made by Visa cards charge up to €7.75 for a €500 purchase -- 5,100pc more expensive than Laser.
Some 30,000 new Visa debit cards have been issued so far to replace Laser cards. AIB, Bank of Ireland, Ulster Bank and Permanent TSB have decided to ditch Laser in favour of Visa because it is easier for consumers to make online and foreign purchases with Visa cards.
For the first time, last year more purchases were put on debit and credit cards than were paid for using cash.
The total spend on cards last year was €23bn, as consumers embraced the electronic payments revolution.
This was higher than the amount of cash withdrawn from banks.
But IPSO said Ireland still lags behind its European counterparts in relation to electronic payments.
A number of studies have found that annual savings of €1bn could be achieved for the economy if people used cash less.
There was a huge security cost from using cash, with a five-fold rise in tiger kidnappings recently, IPSO's Pat McLoughlin said.
Consumers in Ireland use ATMs more than in any other EU country -- they made an average of 40 withdrawals totalling almost €5,000 per head last year.
Debit cards are now more popular than credit cards, with 3.4 million debit cards in issue compared with 2.2 million credit cards.