AIB to start charging 1 cent per contactless transactions - abandoned

Brendan Burgess

Brendan Burgess

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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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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.
 
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.
 
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.
 
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 I found a few news articles but they are out of date and there is very rapid growth.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.
 
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."
 
NoRegretsCoyote said:
Will this be a big revenue earner for them? I make about 50 contactless payments a month.
Click to expand...
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)
 
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."
Click to expand...

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
 
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.
Click to expand...

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."
Click to expand...

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.
 
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.
 
• 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.
 
barbaros said:
If they would increase it from free to 10 cents directly, they would get a worse reaction from their customers.
Click to expand...

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
 
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.
 
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
 
barbaros said:
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
Click to expand...

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.
 
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.
 
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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