AIB has scrapped plans to introduce a fee for contactless payments, until the Covid-19 outbreak is over.
On Monday, the Irish Independent revealed that customers of AIB would no longer be able to avoid banking fees by keeping a certain amount of money in their current account and would in future be charged a fee for contactless payments from the end of May.
Under the plan AIB will charge consumers a ‘tap’ fee – of 1c. The bank is retaining the 20c fee for payments by chip and pin on debit cards.
The move had been described as “a real kick in the teeth” by consumer advocates. And the Covid-19 outbreak has pushed many to avoid cash.
Political parties, including the Labour Party and Sinn Féin, had called for AIB to scrap the plans for the contactless payments.
On Friday Finance Minister Paschal Donohoe said he planned to raise the issue with the bank.
Mr Donohoe said: "In relation to AIB myself and my department will be engaging ourselves directly with all of the banks again across the coming days in relation to this and other issues."
Asked if he viewed the move as exploitative he replied:
"I’d rather engage with AIB on the matter myself first" rather than sending a message through the media.
He said: "The critical thing we need our banks to do at the moment is ensure that the needs that employers have from a cash flow funding point of view are being met."
AIB subsequently announced it was suspending the plan.
“In the light of the current Covid-19 outbreak AIB is suspending the planned introduction of the contactless fee,” the bank said.
Pressure will now come on Ulster Bank and Bank of Ireland, which both have contactless payments, to row back on these fees.