AIB is to start charging its retail banking customers for contactless card payments.
The AIB contactless fee may only be €0.01 to tap and go but will be unpopular.
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Or ‘tap and pay’ as critics will claim.
To be fair to AIB, it is simply following the lead set by rivals Ulster Bank and Bank of Ireland.
Both Bank of Ireland and Ulster apply similar charges for contactless payments.
AIB is also set to charge customers a quarterly current account fee of €4.50 from May.
Ireland has some of the most expensive mortgage rates in Europe.
And increasingly, it is becoming more expensive for current accounts – certainly compared to the UK.
For example, AIB is to charge €0.35 per ATM withdrawal.
Over the counter transactions cost €0.39.
Fees are also rising at RBS subsidiary, Ulster Bank.
Branch payments at Ulster Bank will cost €0.80 from April, up from €0.20.
Customers making payments online or via its mobile app are charged €0.20.
At Ulster Bank and Bank of Ireland, customers with a minimum balance of €3,000 are exempt from transaction fees. However, the maintenance fee – €2 per month at Ulster – still applies.
Low switching rates, Irish market ripe for disruption
AIB is following the same lead here. At present, AIB does not charge maintenance fees for customers with a minimum balance of €2,500. That is set to end with all customers charged a quarterly fee of €4.50.
But for customers aged 66 and over, no maintenance or transaction fees apply.
Furthermore, customers who pay their AIB mortgage from an AIB current account avoid these fees.
Moreover, AIB student accounts, graduate accounts and Basic Bank accounts remain free of charges.
Current account switching rates in the Republic of Ireland, around 1% per year, are even lower than in the UK.
The Irish current account market is ripe for disruption and a former AIB leader has it in her sights.
The formidable Anne Boden, founder of Starling Bank, knows the Irish market well from her time as AIB COO. Starling plans to launch in Ireland in 2020. It would be unwise to bet against Starling making a splash when it launches in Ireland.
