# AIB to start charging 1 cent per contactless transactions - abandoned



## Brendan Burgess (13 Mar 2020)

Update: AIB has announced that it is not progressing with the planned changes 

Update 2:  23rd March.  AIB has announced that it is not progressing any of the changes . You can ignore any letters you received from AIB.

I got this email today which I find confusing - it's the first paragraph of a much longer email

We currently provide Current Account banking free of maintenance and transaction fees, to a range of customers. As part of a review of our fees and charges, keeping a balance of €2,500 or more will no longer result in banking free of these fees. Today, we provide all contactless or ‘tap’ transactions for free and this will change to 1 cent per transaction. These changes start on 30th May 2020.       

The following would be much simpler:

*From 30th May , we will be charging 1 cent per contactless or "tap" transaction 

Brendan *


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## Brendan Burgess (13 Mar 2020)

It goes on to say that some categories of accounts are exempt 


Student account
Graduate account
Advantage (66+) Account
Basic Bank Account 
And customers who pay their home loan from their AIB account will also be exempt.


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## Brendan Burgess (13 Mar 2020)

We will no longer be charging surcharge interest on accounts in an unauthorised overdrawn position or on any balance that exceeds an agreed overdraft limit. This means you may pay less interest than you previously might have in these situations.


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## Brendan Burgess (13 Mar 2020)

Even though you still have banking free of maintenance and transaction fees so those changes do not affect you, we have to let you know. If you do not wish to accept the changes outlined in this email, you have the right to close your account, clearing anything you owe on it.


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## NoRegretsCoyote (13 Mar 2020)

What are the statistics on contactless use in Ireland? I found a few news articles but they are out of date and there is very rapid growth. 

Will this be a big revenue earner for them? I make about 50 contactless payments a month.


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## RedOnion (13 Mar 2020)

I have issues with a lot of banks communications, and how they're very carefully worded to be correct.
Then you get an email from Revolut, worded like something from one of your drinking buddies!

It's almost impossible to write something clearly, that they can send to every customer. 

The email I got was clear enough; I currently get free banking for keeping over 2,500 in account, and it called out that's being removed. There are 2 bullet points that apply to me, and then a generic bit that goes on...

However, similar to the insurance conversation, most people will ignore this.

Here's opening wording of my email:

"We are writing to inform you that we are making the following changes to your Personal Current Account:
• Your Current Account banking has previously been provided free of maintenance and transaction fees when you have kept a minimum balance of €2,500 in each quarter. This option will be withdrawn on 30th May 2020.
• Contactless transactions, also known as 'tap', are currently free. This will change to 1 cent per transaction from 30th May 2020."


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## RedOnion (13 Mar 2020)

NoRegretsCoyote said:


> Will this be a big revenue earner for them? I make about 50 contactless payments a month.


No. It's not free to process these transactions. I'd hazard a guess that there's around a million contactless transactions a day here (across all the banks)


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## Brendan Burgess (13 Mar 2020)

RedOnion said:


> • Your Current Account banking has previously been provided free of maintenance and transaction fees when you have kept a minimum balance of €2,500 in each quarter. This option will be withdrawn on 30th May 2020.
> • Contactless transactions, also known as 'tap', are currently free. This will change to 1 cent per transaction from 30th May 2020."



That is  very clear.  And the way it should be written. 

But you make a good point. They have so many products, that they have to write different letters to everyone. 

Brendan


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## Brendan Burgess (13 Mar 2020)

NoRegretsCoyote said:


> I make about 50 contactless payments a month.



Hi Coyote

I was thinking that you could switch to Revolut and get it free, but then I figured out...

It  will cost you 50 cents a month or €6 a year.

Not worth getting excited about.

Brendan


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## NoRegretsCoyote (13 Mar 2020)

It's very sloppy wording.



RedOnion said:


> • Your Current Account banking has previously been provided free of maintenance and transaction fees when you have kept a minimum balance of €2,500 in each quarter. This *option *will be withdrawn *on 30th May 2020.*



It's not really an 'option' though, is it? The customer didn't have a choice in the matter, it was simply done automatically if the balance was maintained. I would call it a 'facility', but indeed the sentence works without a noun at all.



RedOnion said:


> • Contactless transactions, also known as 'tap', are currently free. This will change to 1 cent per transaction *from 30th May 2020*."



One charge is coming into effect "on 30th May 2020", the other "from 30th May 2020". Is this the same day? I suspect it is, but you could read it that the current account fees will apply from 1 June and the contactless charge from 30 May.


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## barbaros (13 Mar 2020)

The problem is 1 cent is just a symbolic price as the beginning of non-free tap transactions. There is no guarantee that they will increase it to 5 cents per tap in next year, from now on they can just increase it as much as they want. If they would increase it from free to 10 cents directly, they would get a worse reaction from their customers.

I wouldn't mind paying 1 cent per transaction, but then I have to pay 4.50 maintenance fees plus 39 cents for each cash withdrawal plus 20 cent for online payments and direct debit. Which gets me mad. I moved to AIB from PTSB. Time to move to another bank.


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## cork (13 Mar 2020)

• Your Current Account banking has previously been provided free of maintenance and transaction fees when you have kept a minimum balance of €2,500 in each quarter. This option will be withdrawn on 30th May 2020.

So, free transaction and maintenance banking with the AIB will be gone.


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## Brendan Burgess (13 Mar 2020)

barbaros said:


> If they would increase it from free to 10 cents directly, they would get a worse reaction from their customers.



Hi barbaros

You are probably right.

But if AIB does increase the charges much higher than the other banks, then you can switch banks.

Brendan


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## barbaros (13 Mar 2020)

The problem is there is not much bank left to switch to. PTSB is terrible bank, way outdated. AIB is the most modern one, but they are much more expensive. In the end, I think I will keep my own savings and get my salary etc to an irish bank, and do my daily spendings, withdrawals etc from a fintech bank like n26 or revolut.

KBC has still fee waiver condition but I doubt they will keep it for long since other banks starts to charge more and more. I will either open EBS account or KBC account but the problem is EBS is free and super basic and if I KBC introduces the same fees then it will be useless.


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## Brendan Burgess (13 Mar 2020)

Hi Barbaros 

I switched to Revolut and haven't looked back. I pay everything with in now. In fact, even if  Revolut introduced charges, I would continue to use it as it's so much better than AIB which is so much better than the other banks

Brendan


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## NoRegretsCoyote (13 Mar 2020)

barbaros said:


> I wouldn't mind paying *1 cent per transaction*, but then I have to pay 4.50 maintenance f*ees plus 39 cents for each cash withdrawal*



If you're tapping more you're withdrawing less cash!

Highly unlikely that 39 taps will cumulate to one normal cash withdrawal, so you're probably better off.

I've given up on carrying coins due to contactless payments and it's really nice. I can also keep track of where and what I'm spending on much more easily.


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## EmmDee (13 Mar 2020)

barbaros said:


> ...PTSB is terrible bank, way outdated. AIB is the most modern one, but they are much more expensive...



D'ya think there is a connection between service/platform and cost?


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## losttheplot (13 Mar 2020)

I use a credit card for all tap payments and withdraw cash about once a quarter. Also get cash back (0.5%) for using credit card.
I'd worry once the charges per tap come in the next step is a tap tax.


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## odyssey06 (13 Mar 2020)

In the light of the current Covid-19 outbreak, AIB is suspending the planned introduction of the contactless fee. 



			https://twitter.com/AIBIreland/status/1238536866162409472?s=20


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## HollowKnight (13 Mar 2020)

I'd've liked their email to include what the last quarter would have cost if their charges were implemented. 
It seems expensive compared to the last 15+ years of free banking.


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## Sarenco (14 Mar 2020)

Good article on ways to reduce bank charges -








						Bank charges: How to cut the fees you pay to your bank
					

AIB this week announced changes to its current account fees - ending free banking for many and introducing a charge on contactless payments for the first time. But there are ways to reduce - or eliminate - the amount you're paying to your bank, writes Adam Maguire.




					www.rte.ie


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## Mrs Vimes (14 Mar 2020)

HollowKnight said:


> I'd've liked their email to include what the last quarter would have cost if their charges were implemented.
> It seems expensive compared to the last 15+ years of free banking.



I haven't paid fees to AIB in years as I have kept my balance above €2500 at all times but each quarter they debit and credit the fees that would have been due so I can see what I'm saving.
I also pay for pretty well everything by credit card and then pay that off before it's due so I have fewer transactions on my current account than if I was using debit card for everything (makes it easier to ensure I don't go under €2500 balance).
I should start getting the cashback soon too as I have already spent almost €5000 on credit card since they brought that in.


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## RedOnion (23 Mar 2020)

In a press release this morning, AIB have suspended the introduction of fees for customers maintaining a balance over 2,500
(The previous announcement was only in relation to contactless charges).

" AIB has suspended the planned introduction of maintenance and transactions fees for customers 
who keep a minimum balance of €2,500 per fee quarter. Customers who received correspondence 
from the bank can disregard the changes to fees and charges advised."


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## Mrs Vimes (23 Mar 2020)

Excellent news - we just got the letter informing us of the new fees this morning!


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## NoRegretsCoyote (24 Mar 2020)

It's a poor move by them to cave in. The value to a consumer from each contactless transaction is easily >1c.

They'll just cross-subsidise this from other services, mainly retail lending.


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## losttheplot (1 Apr 2020)

What do people typically pay per quarter for bank charges. I've 2 current accounts and the charges were about €6 and €9. I rarely use ATM or debit card, mostly tap with credit card.
I ask as I came across a Twitter thread complaining banks were still charging during a crisis. Most replies were slating the banks and how they were robbing people and giving examples of how much the banks had robbed them. Some of them quoting €70 a quarter for charges. Alot of money if you're struggling, but how do you get bank charges that high.


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## twofor1 (1 Apr 2020)

losttheplot said:


> What do people typically pay per quarter for bank charges.



€40 went out of my AIB current account on Monday for bank charges for this quarter and came straight back in again as I keep the minimum €2.5K balance.

I never paid much attention to charges as I don’t pay them, if I  lose the free banking I will be a lot more vigilant.


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## Brendan Burgess (1 Apr 2020)

losttheplot said:


> Some of them quoting €70 a quarter for charges.



I have a busy enough account and it amounts to €25 per quarter - which I get back as I have an AIB mortgage. 

I don't know how they get to €70 unless they are still writing cheques, cashing cheques or lodging cash.

It could be a business account.

But it could also be overdraft interest.

Brendan


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## twofor1 (1 Apr 2020)

twofor1 said:


> I never paid much attention to charges as I don’t pay them, if I  lose the free banking I will be a lot more vigilant.


Wow I just looked at our annual fees statement for the year ending earlier this month.

There were the 4 quarterly charges of €4.50.
There were over 500 contactless payments which were free anyway.
Over 260 debit card purchases.
Over 130 direct debits.
Over 80 sepa credits.
Over 50 atm withdrawals.
Over 100 other charges, phone / internet, electronic transfers, lodgements etc.
We don’t have a cheque book or overdraft.
Total for the year that was taken and credited back with free banking, just over €150.


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## losttheplot (1 Apr 2020)

Brendan Burgess said:


> I have a busy enough account and it amounts to €25 per quarter - which I get back as I have an AIB mortgage.
> 
> I don't know how they get to €70 unless they are still writing cheques, cashing cheques or lodging cash.
> 
> ...


Didn't get the impression from Twitter that they were business accounts. Probably multiple withdrawals of small amounts. I remember one friend way back who used to withdraw money from the ATM and then go into the bank and lodge it to his savings account.


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## NoRegretsCoyote (1 Apr 2020)

losttheplot said:


> Didn't get the impression from Twitter that they were business accounts. Probably multiple withdrawals of small amounts.



I think a lot of people make small cash withdrawals as a kind of spending discipline device.

I'm not sure why they should pay the same as people who make fewer-but-larger withdrawals.


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## elcato (2 Apr 2020)

I'd say it was probably one person who clearly does not understand how finance works. Much better just to call Pearse Doherty and let him get great publicity shouting about the 'childer'


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## Brendan Burgess (2 Apr 2020)

Here are the main AIB fees 







 €18   -  There were the 4 quarterly charges of €4.50.
                  There were over 500 contactless payments which were free anyway.
€52    Over 260 debit card purchases.
€26     Over 130 direct debits.
€16   Over 80 sepa credits.
€18   Over 50 atm withdrawals.
€20   Over 100 other charges, phone / internet, electronic transfers, lodgements etc.
€150  

Seems a reasonable charge for such a busy account. 

Brendan


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## HollowKnight (2 Apr 2020)

With aib for main current account and it's generally between €25 and €30.


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## losttheplot (2 Apr 2020)

I've a Revolut account also. I can transfer €100 using Google pay which is linked to my AIB visa card. So you can essentially withdraw cash from visa without out any cash fees. I wonder does the Google pay transaction get the platinum cash back too.


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## tomdublin (3 Apr 2020)

Brendan Burgess said:


> Here are the main AIB fees
> 
> View attachment 4403
> 
> ...


150 per year equates to around 300 Euro pre-tax income (in the higher income tax bracket), i.e. 3,000 Euro every ten years or 12,000 Euro during an average working life. Why spend 12,000 Euro on something you could easily get for free?  If you really don't need, want or care about the money giving it to charity instead of AIB might be a better option.


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## Brendan Burgess (3 Apr 2020)

The thing is you don't get stuff for free.  

You end up paying for it some other way. Or maybe someone else pays for it.

A lot of people switched to ptsb for "free" banking. They then took out mortgages with ptsb as most people apply to their own bank first. Every year, they are paying multiple times the fees savings in higher mortgage interest.

Brendan


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## Sarenco (14 Sep 2020)

AIB drops plans for contactless payment fees but maintaining an account balance of €2,500 will not save you from fees from November -








						AIB drops plans for contactless payments fee after backlash
					

AIB has yielded to public pressure and dropped plans to introduce a fee for contactless payments.




					www.google.ie


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## ATC110 (15 Sep 2020)

Sarenco said:


> AIB drops plans for contactless payment fees but maintaining an account balance of €2,500 will not save you from fees from November -
> 
> 
> 
> ...



I think all banks will introduce negative interest rates in the near future, which will also provide an opportunity for the government in the form of a deposit levy similar to the pension fund levy


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