Written answers

Thursday, 13 April 2017

Photo of Michael FitzmauriceMichael Fitzmaurice (Roscommon-Galway, Independent)
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74. To ask the Minister for Finance the reason banks providing merchant services to retailers have not passed on the reduction of the bank interchange rate to their customers following budget 2016 and in the Finance Act 2015; and if he will make a statement on the matter. [18939/17]

Photo of Michael FitzmauriceMichael Fitzmaurice (Roscommon-Galway, Independent)
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75. To ask the Minister for Finance his plans to ensure banks providing merchant services to retailers pass on the reduction of the bank interchange rate to their customers given by the Minister in budget 2016 and in the Finance Act 2015; and if he will make a statement on the matter. [18940/17]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 74 and 75 together.

In Budget 2016, I introduced measures to support retailers by reducing costs and incentivising electronic payments. I also announced an increase in the limit on contactless payments from €15 to €30 and reformed stamp duty to remove it from debit cards; replacing it with a 12c charge per ATM transaction though with a cap to ensure no consumer would be worse off.

In addition, I made changes to interchange fees faced by retailers accepting cards. I announced that an EU regulation would halve the interchange fee charged to retailers to 30 basis points for credit cards and that I was halving the corresponding fee for domestic consumer debit cards to 10 basis points. These changes came into effect on 9 December 2015 and significantly reduce the costs of accepting card payments, as interchange fees make up part of the overall charges collected by acquirers from retailers.

An acquirer is a financial services company (e.g. a bank, bank subsidiary or payment institution) which manages the account and relationship between a retailer and the various card schemes. All acquirers in Ireland are independent commercial entities and I have no statutory role in relation to the charges applied by acquirers, other than setting caps on interchange fees as I have done. Acquiring is a competitive market and I am aware that there have been developments in the market, and that a range of options is available to merchants from which to choose. The most appropriate option will depend on their circumstances, and retailers in general could stand to benefit from shopping around for lower rates from acquirers for accepting cards.

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