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Credit transfers too expensive Back  
An EU Commission report showed that while Irish bank charges are competitive certain elements of the systems are non-competitive and opaque.
A European Commission report has found that some bank charges in Ireland are competitive when compared with its European cousins but has underlined that Irish cross- border credit transfers are the second most expensive in Europe.

The EU report presents Irish banks as being more expensive than the EU average for cross-border credit transfers, with an average cost of e24.16. Only Portugal is more expensive.

The report goes on to say that bank charges in Ireland are not transparent. Of the four banks surveyed in Ireland (Bank of Ireland, AIB, National Irish Bank and Ulster Bank) none of them had bank charges detailed on their statements with the amount being debited simply indicated. In terms of length of time for transaction processing Ireland also fared badly having the highest average duration of cross-border credit transfers at 5.91 days. This figure is up from 3.24 in 1999. The report found that the EU average was 3.31 days.

In carrying out the survey, Ireland was compared with Finland. On average, transfers to Ireland from Finland cost 57.5 per cent less than transfers in the opposite direction. However, according to Felix O’Regan, spokesperson for the Irish Bankers Federation, comparing Ireland with Finland is not appropriate. He argues that Finland, unlike Ireland, has a very highly developed electronic payment structure, which results in transfers being very efficient and cost-effective. Therefore the two countries are not really comparable.

The IBF added that Irish banks have consistently advised that credit transfers are not a cost-effective means of transferring relatively small amounts. Bank cards and currency drafts are more cost-effective methods for consumers when making cross-border payments and transfers of the order of e100. In its defense of Irish banking charges the IBF said that the average charge by Irish banks to customers making a credit transfer of e100 has fallen by over 18 per cent between 1999 and early 2001. The IBF also pointed out that a number of Irish banks included in this study have since announced further reductions in their charges and these are not reflected in the latest EU findings.

Although there have been calls to make the cost of transferring funds across borders the same as for domestic transfers the IBF said that this is not a feasible option. The IBF said the increased charges for cross border transfers reflects the fact that the euro zone does not have a single, central common infrastructure for the routing, clearing and settlement of each type of cross-border payment, such as exists within each of the member states for domestic payments.

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