Retailers' alarm on card fees after it emerged they will soar
Charges for new Visa system will be even higher than feared
Published 13/08/2011 | 05:00
A RETAILERS' lobby group is to call an urgent meeting with companies that process debit-card payments after it emerged that fees for using new versions of the card will soar.
The increased charges for using new debit cards will be even higher than had first been revealed.
Old-style, Irish-based Laser debit cards are being replaced with new Visa ones, so that it will be easier for customers to make online and foreign purchases. But there are a significant number of higher charges.
Retailers were not immediately aware of the significant price increase because of the slow roll-out of the new cards.
Last night, John Foy, the president of RGDATA -- which represents independent grocers -- said retailers were only now becoming aware of the higher charges.
The 3,000 members of the organisation are to press for better terms.
Under the Laser scheme, the interchange fee was just 4c, no matter how big the transaction, but it ranges up to 10c on a Visa debit card. This 150pc hike in fees will be passed on to consumers in higher prices. The interchange fee will come on top of the increased merchant service fee, hitting retailers, and in turn customers, hard.
The domestic banks have said the new fee structure is not being imposed by them and that the new system is part of a necessary new technology.
Businessman Clom Lyon, who runs the payments-processing firm Realex, based in Dublin, has estimated that the extra charges associated with the introduction of Visa debit cards will run to €24m.
He said these additional fees for retailers would be passed directly on to consumers.
Ulster Bank, Permanent TSB, Bank of Ireland and AIB are all in the process of replacing Lasers with Visa debit cards, which they claim are better for customers.
Laser only operates in Ireland and is being dropped in favour of Visa, which is accepted internationally. Laser cards sometimes do not work online or outside the country.
The new cards will work in the same way as the old ones -- people will be able to use them to withdraw money from a cash machine and to pay for goods and services by swiping the card.
A spokesman for Visa said its debit card was a different product to Laser, so it had a different charging structure.