Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

1524. To ask the Minister for Transport, Tourism and Sport the cost his Department incurred in each of the past five years due to debit and credit card payment services and banking fees; the financial institutions to which the payments were made; and if he will make a statement on the matter. [37229/17]

Shane Ross (Dublin Rathdown, Independent)
Link to this: Individually | In context | Oireachtas source

The Deputy will note the Department makes a large amount of important and necessary banking payments to individuals and organisations in all corners of the island of Ireland. These include the tourism bodies and other public bodies in sports and transport, sports capital grants, and major Public Transport projects as well as safety and regulatory programmes for the Irish Coastguard, Aviation and Maritime services.

Given the large volume of payments (in excess of 20,000 individual bank transactions per annum) made by this Department, the costs are extremely low and represent excellent value for money on behalf of the taxpayer as highlighted in the table below. The Department actively takes proactive steps to manage our banking transactions with the objective of reducing fees.

We are also participating on a working group on Financial Shared Services in further reducing bank costs in order to deliver a world class service as part of the current Civil Service renewal process.

In addition to outgoing payments the accounts above are used for certain of those payments receivable by this Department. However, the vast majority of payments receivable by this Department are related to online motor tax.

The Online Motor Tax service at www.motortax.ie incurs two types of fees, debit and credit card financial clearance charges to Realex Payments, and bank acquiring fees to Elavon. Both these services are provided under Office of Government Procurement (OGP) frameworks, and all agencies across the public service can avail of them.

The costs incurred by the Department’s online motor tax service for both these services are set out below, for the periods requested. Just over €21m has been paid for the period 2012 to 2017 inclusive. In that same period, over €3.8b has been collected by the service, meaning the charges incurred are just a little over a half of one percent.

New contracts put in place for both services since 1 July 2016 have resulted in significant savings for the Department, over 25% for financial clearance charges, and over 30% for bank acquiring charges, both over a full year. Furthermore, it should be noted that some of the bank charges incurred by the Department for the online service would previously have been incurred by local authorities, where the motor tax transaction was processed by a motor tax office and where a credit/debit card was used.

This is a very efficient way of collecting motor tax that is due to the State and is also very convenient for taxpayers. Data revealed by a December 2016 special report by the C&AG (no.97) suggests that the cost of processing an online payment is around half that of a physical motor tax payment.

The Road Transport Operator Licensing Unit also collect fees related to the issuing of licenses. This is an important regulatory function and again the resources are used to support the Exchequer in defraying the costs of that service and related functions.

This particular online license fee payment service started in 2014, so there are no figures for previous years.

Between 2014 and November 2016 some fees were paid to the Local Government Management Agency; and from November 2016 to date, Realex has been paid for the service the LGMA had previously provided.

The contracts with Realex and Elavon are on similar terms to the contracts mentioned in the context of the motor tax online service. The volume of transactions in this case may be smaller but the comparative cost ratio helps to ensure that value for money in this operation is being achieved.

The figures shown below for annual fees income are for total income from both online and paper applications. It was not possible to present separate figures for fees collected online but you should note that online transactions account for approximately 60% of all applications.