Noonan calls on retailers to pass on lower card cost to shoppers
Retailers have been called on to cut their prices in response to lower fees for shops when processing debit and credit cards coming into effect.
Finance Minister Michael Noonan announced the introduction of lower fees for shops processing debit and credit cards from yesterday. He said he wants to see retailers pass the benefits on to consumers.
The fees have been halved. Retailers denied they would just use the lower fees to fatten their profit margins.
The "interchange fees" banks charge retailers for accepting debit and credit cards have been lowered and capped, which will result in big savings for retailers.
Mr Noonan said the changes would save retailers a collective €36m. Interchange fees are charged by a cardholder's bank to a retailer for debit and credit card transactions.
They do not impact consumers directly, although they affect consumers indirectly through higher prices and a lower willingness by some retailers to accept card payments.
Chief executive of the Consumers' Association lobby group, Dermott Jewell, called on retailers to pass on their reduced costs in the form of lower prices for shoppers.
"I would demand this be passed on. We experienced with hoteliers and restaurateurs when the VAT [valued added tax] was lowered many failed to put more money in consumers' pockets."
Asked if retail was not already very competitive with much discounting, Mr Jewell said: "This is a clear opportunity for additional discounting by retailers and it is time the lower debit and credit card fees were passed back with immediate effect."
Head of Retail Excellence David Fitzsimons said he hoped the lower costs would be passed on.
The group, which represents 13,000 stores, said retail was highly competitive. But Mr Fitzsimons added that interchange fees were just one aspect of retailers' costs. The minimum wage will rise by 6pc next year. For most retailers wages represent around one-fifth of costs, he said.
"This is a good and welcome change. Will it be passed on to consumers? I don't know, but interchange fees are just one of the metrics in terms of running a retail business," he said.
Thomas Burke, of Retail Ireland, said retailers would have no choice but to pass on the savings to shoppers as competition is intense. The group, which represents larger retail groups, said it had been lobbying for years for lower interchange fees.
Mr Noonan said: "We now want to see consumers benefit from these changes if they choose debit cards as their preferred method of payment."