Terence Flanagan (Dublin North East, Fine Gael)
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Question 40: To ask the Minister for Finance his views on a matter (details supplied) regarding electronic payments and a way to reduce costs for small business; and if he will make a statement on the matter. [14469/12]

Michael Noonan (Limerick City, Fine Gael)
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Each credit institution wishing to impose a new non-interest charge or increase an existing charge is required to notify this charge to the Central Bank under section 149 of the Consumer Credit Act 1995 (as amended). Each notification is assessed in accordance with the criteria laid down in the legislation as follows:

· promotion of fair competition;

· the commercial justification submitted in respect of the proposal; and

· the effect on customers or a group of customers.

The Central Bank has confirmed to me that the charges referred to in the details supplied to this question have been approved by the Bank in accordance with the provisions of the Consumer Credit Act.

As I have no statutory function in relation to such charges, it would not be appropriate for me to comment further on the details supplied which, subject to their approval by the Central Bank, are a commercial matter for the institution in question.

Notwithstanding the particular circumstances referred to in the question, Government policy is to promote the increased use of electronic methods of payments throughout the economy. Ireland continues to lag significantly behind our European peers in the use of cheaper, more efficient electronic payment instruments. This is not only a competitiveness issue for Ireland, but our dependence on paper-based payments has social costs and also has implications for consumer choice and for financial inclusion. In addition, it has the potential to significantly impede Ireland's ability to take advantage of the foreign direct investment and indigenous growth opportunities that are likely to materialise from the advent of new technologies and from recent changes in the EU regulatory framework for payments.

In June of last year, I asked the Central Bank to develop a National Payments Plan, for Government consideration and approval, to achieve a decisive shift towards the greater use of electronic payments. The Central Bank has commenced its work in this regard and has convened a high level steering group to oversee this work, comprising representatives of consumers, businesses, the banking sector and the public sector. The Bank has engaged in a process of consultation with a broad range of stakeholders as well as undertaking the research that will be required to underpin a National Payments Plan. I am informed by the Bank that it expects to submit a draft National Payments Plan to me before the end of this year.