Joan Burton (Dublin West, Labour)
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Question 254: To ask the Minister for Finance his views on moves in retail banking from the use of Laser cards, charged on a per transaction basis and Visa or Mastercard debit cards, charged on a percentage basis; his further views on whether Irish based retail banks may use the opportunities arising from reduced competition to significantly increase direct and indirect charges to customers for banking services; and if he will make a statement on the matter. [48555/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I refer the Deputy to my answer to Question No. 59 of 7 December 2010. Fees may be charged to retailers by acquiring banks for the use of debit or credit cards. These charges include fees for items such as terminal rental, customer services and dispute resolution services. They are a function of and are determined by the interchange fees set by the payment card schemes for the participating acquirers. Interchange fees are paid by the merchant's acquiring bank to the cardholder's bank every time a payment card is used. While interchange fee levels vary depending on the type of payment card, the purpose is to reflect the real operating costs. I understand that certain international card schemes charge fees on the basis of a percentage of the value of the transaction rather than a per transaction fee as is the case with the Laser Card scheme (which is an Irish-based debit card scheme managed by the Irish Payment Services Organisation on behalf of those Irish banks that operate the Laser Card Scheme).

As Minister for Finance, I do not have any role in the regulation of such fees as they are a commercial matter between the given card scheme, the acquiring bank and their customers.

With regards to non-interest charges imposed by retail banks for banking services, all credit institutions, money transmitters and bureaux de change are required, under Section 149 of the Consumer Credit Act 1995 (as amended), to notify the Central Bank if they wish to impose new charges or increase existing charges for customers.

These charges are assessed by the Central Bank in accordance with the criteria laid down in the legislation as follows:

the promotion of fair competition between holders of authorisations and credit institutions;

the commercial justification submitted in respect of the proposal;

the impact new charges or increases in existing charges will have on customers, and

passing on costs to customers.

Having considered the proposed charge(s) under the assessment criteria set out in the legislation, the proposed charges are either rejected, approved at lower levels than requested by the entity or approved in full. Approvals are issued in the form of a letter of direction and the entity is legally bound to comply with this letter of direction. The letter of direction sets out the maximum amount the regulated entity is allowed to charge.