Loss of free banking prompts bigger cash withdrawals
Survey finds return of bank charges influencing debit card usage
The reintroduction of banking charges has prompted consumers to take out larger amounts of cash from ATMs at each withdrawal. Photograph: PA
The reintroduction of banking charges has prompted consumers to take out larger amounts of cash from ATMs at each withdrawal and to use their debit cards for purchases less often, a survey commissioned by the National Consumer Agency has found.
The survey of 1,008 adults by Behaviour & Attitudes suggests that 28 per cent of consumers have responded to the loss of free banking by selecting larger sums for withdrawal on each visit to an ATM, while a quarter have grown more reluctant to use debit cards at the till.
The NCA said the changes in behaviour were “a concern in the context of the National Payments Plan”, which aims to increase the use of electronic forms of payment such as debit cards.
Some 34 per cent of the current account customers polled said they no longer qualified for free banking. These customers were then asked if the loss of free banking in the past year had prompted a change in the ways they use their account.
The survey also found that 13 per cent of consumers were using their credit cards more often for routine transactions.
“It is clear that consumers are altering their behaviour to reduce costs in light of changes in charging structures on current accounts,” said Fergal O’Leary, director of public awareness and financial education at the agency.
About a third of current account customers said they could still avail of free banking, down from 37 per cent in June 2013, while one in seven said they did not know whether they were being charged fees.
Almost six in 10 said they had not checked to see if there was a better deal or package available at another bank, while just 6 per cent had switched their current account in the past 12 months.
There is now much less choice in the current account market, Mr O’Leary said. However, current account holders can compare costs on the site consumerhelp.ie.
The objective of the Government’s National Payments Plan is to make savings of €1 billion annually to the Irish economy by increasing the use of electronic forms of payment such as debit cards and electronic banking.
The steering committee behind the plan, which was launched in April 2013, wants to double the number of electronic payments in the economy by 2015 and reduce usage of cash and cheques to the EU average.