Retailers - electronic payments encouraged

[Brendan Burgess]

Investments in electronic payments systems

Excessive fees for card payments

halving interchange fees to 10 cents - will save retailers €36 m per year

To be passed on to consumers.

€15 to €30 payment limit increased for contactless card

 

[Lightning]

I don't understand this.

Under new EU legislation:
(1) Interchange fees applied to personal credit cards payments cannot exceed 0.3%.
(2) Interchange fees applied to personal international debit cards payments cannot exceed 0.2%.
(3) Interchange fees applied to personal 'large' domestic debit cards payments cannot exceed 0.2%.
(4) Interchange fees applied to personal 'small' domestic debit cards payments cannot exceed 0.2% and 5 cent per transaction. This applies for the next 5 years which is the 'transition period'.

How is Noonan proposing a fee of 10 cent per transaction when the EU legislation says it cannot exceed 5 cents? It makes no sense to me.

What other changes is Noonan making to intercharge fees?

Has anyone got more info on this?

 

[thedaddyman]

is there a definition of what a "small" payment is?

 

[Lightning]

No, the EC left it up to member states to determine what a small payment is. The Irish government need to define it as part of legislating for the new interchange fees. However, the percentages and maximum charges per transaction are not open to local interpretation. Hence, why I am perplexed by Noonans announcement today which seems to contravene the EC legislation.

The UK introduce their new interchange fees from November.

I wonder if we will need to wait for the Finance Bill to get clarity as how we will inscribe the new EC rules into law.

 

[Lightning]

Clarity, or so it seems, from the Irish Times today here ... http://www.irishtimes.com/business/...t-of-processing-debit-card-payments-1.2390383

Apparently, the interchange fee, for personal debit card transactions, is being set at 0.1% rather than the 10 cents reported.

Again, the max fee, for the next 5 years, is 0.3% and 5 cent per 'small' transaction. 0.1% falls well below the EU maximum threshold. Well below UK levels as well. The IT article seems to imply that Noonan is not applying a fee on 'small' transactions. 0.1% is tiny. Retailers will be trilled. Banks will not be happy.

Still no news on what the personal credit card interchange fee will be?

Anyone know what date the new interchange fees for debt cards is applicable from?

Anyone got any more information on this?

 

[Lightning]

Full details are now on the DoF website:

0.10% is a weighted average interchange fee for debit cards. i.e. they will be applying a 'small' transaction fee. Not clear as to what that will be.
0.30% is the credit card intercharge fee.
Applies from 9 December 2015 with some exceptions.

Effects:
Reward cards become less profitable for the banks.
More difficult to offer free banking as less interchange revenue.

A maximum fee limit is now being set on interchange for both debit and credit cards. For debit cards, the maximum for domestic debit card transactions will be set at a weighted average of 0.10% of the transaction value, which is half the current level. This would create greater incentives to retailers to accept cards, by reducing the cost of card acceptance for retailers by €17m p.a. The maximum for domestic credit card transactions is to be set at 0.30% in line with the Multilateral interchange Fee regulation, saving retailers in excess of €19m p.a. Both of these limits will come into force on 9th December 2015. Some smaller schemes will be exempted from these B.27 new limits until 9 December 2016, to give them time to restructure their business models as required. This measure will have no direct effect on the exchequer, though will result in cost savings for public bodies which accept card payments.