Over the last 12 months the major card-issuing banks have increasingly opted out of the domestic Laser scheme in favour of Visa Debit, claims CMS Payments Intelligence, a payments transfer consultancy. The issuing banks are touting the benefits of widespread international acceptance for Visa but the cost to Ireland’s retailers to accept these cards is double that of Laser cards, claims CMS.
Ulster Bank and Permanent TSB have already made the switch from Laser Debit to Visa Debit while Bank of Ireland began re-issuing at the end of last year and AIB will begin in the middle of this year. As a result, Laser’s dominant position – previously accounting for around 90 per cent of debit cards – will practically disappear, claims CMS which estimates that this could cost merchants €10m a year in higher merchant service fees.
Recent changes to Visa’s interchange structure have provided some relief for low value payments. Since February 2011, accepting a €20 payment from consumers travelling from the EU or UK will now cost 70 per cent less. Moreover, since April domestic transactions below €15 are also substantially cheaper. However these discounts are only likely to offset a small proportion of the Visa debit increase and in many cases, acquirers may not pass on the full benefit of these reductions to merchants.
With the recent success of regulation in the US enabling retailers to take greater control over card payment acceptance and associated charges, merchants need to be working together to challenge the industry as a whole, advises CMS which recently held its first-ever seminar in Dublin’s Westbury Hotel which focused specifically on the Irish market and the challenges being faced by all merchants as a result of changes in the card payments market, specifically the rising cost of interchange.