consumers 'will pay for fees freeze'
CONSUMERS will end up being hit with higher charges if the European Commission goes ahead with plans to cap fees on credit and debit card transactions, Mastercard Ireland has claimed.
The European Commission is set to formally propose this week that fees that banks can charge retailers to process card payments be capped.
But head of Mastercard in Ireland, Peter Corrigan, claimed that the EC move will end up being passed on to consumers in the form of either higher credit card interest rates or higher banking transaction fees.
In the last few weeks AIB and Bank of Ireland have hiked the fees they charge consumers for processing debit and card card payments.
Mr Corrigan said similar caps in the US benefited retailers and banks reacted to getting lower fees by imposing fees for the majority of people who have current accounts.
"The impact of imposing caps will be to significantly reduce the fees for banks. Retailers would gain but the savings would not be passed on to consumers," he said.
The EU argues that the costs imposed by banks on retailers are ultimately borne by consumers. Reducing the fees would reduce the cost of electronic payments, a saving that would eventually be passed on by retailers to consumers in the form of lower prices, EU officials argue.