ATM tax replacing debit card stamp duty

allthedoyles

Instead of paying a flat rate of stamp duty, consumers will now be slapped with a 12c charge every time they withdraw cash from an ATM using a debit card.

http://www.independent.ie/business/budget/the-measures/firstever-atm-tax-replacing-debit-card-stamp-duty-31608694.html

This is going to cost me money , as I use card a lot at ATM's .

Dont use card much in shops as most retailers around me want me to spend a minimum of €10 .

Now that the Government want us to use card directly in shops , anyone know if this minimum spend will be withdrawn , or would it be possible to withdraw cash at shop counter without buying anything ?

Does Aldi/Lidl give cash back ?

ytpe2r5bxkn0c1

They said the charges will be capped at your current stamp duty cost so it won't cost you a cent more.

Cortina_MK_IV

Aldi/Lidl don't give cash back.

coylemj

Franco Wide Wardrobe wrote: »

They said the charges will be capped at your current stamp duty cost so it won't cost you a cent more.

That means they (Govt) will lose money so what's the point in making it more complicated than it already is?

Edit: You're correct. From the summary document on revenue.ie ....

Stamp Duty on combined debit / ATM cards

• Abolish the current €2.50/€5 per annum charge on ATM cards and combined (ATM & debit) cards from 1st January 2016
• Introduce a new 12c ATM withdrawal fee from 1st January 2016, which would be capped at €2.50/€5 per annum per card

Can't see the sense in this, the banks will have to count the annual number of transactions for the purposes of this tax and in most cases (>20 transactions p.a.) , they will still be charging customers the same as before. In some (low usage) cases there will be a loss of revenue so I can't see the point in this change

AlmightyCushion

coylemj wrote: »

That means they (Govt) will lose money so what's the point in making it more complicated than it already is?

They say it's to encourage people to use cards more and cash less. Though I worry that in time they'll get rid of the cap. I try and use my card as much as possible but I pay rent in cash (Landlord prefers it that way, I'd prefer a standing order myself) and for nights out I prefer cash so I really hope they don't remove the cap any time soon.

coylemj

AlmightyCushion wrote: »

They say it's to encourage people to use cards more and cash less.

The problem with a transaction levy is that it encourages people to make bigger (and hence fewer) withdrawals so they end up carrying around more cash than before which will surely defeat the purpose of the change.

As for contactless cards, they're ok for McDonalds and coffee shops but like you, I prefer to use cash when on a night out.

AlmightyCushion

coylemj wrote: »

The problem with a transaction levy is that it encourages people to make bigger (and hence fewer) withdrawals so they end up carrying around more cash than before which will surely defeat the purpose of the change.

As for contactless cards, they're ok for McDonalds and coffee shops but like you, I prefer to use cash when on a night out.

That's probably what will happen alright. I don't use my debit card much at all, it's my credit card I use. I don't like having loads of transactions in my current account. As long as it doesn't apply to cash back I'll just get the first pint on the card and get cash back for the rest.

Delta2113

I've seen this question asked elsewhere - will you be charged 12 cent if say you take cash out whilst on holiday in the U.K.,U.S.A.,South Africa etc.?

Nervous Wreck

Delta2113 wrote: »

I've seen this question asked elsewhere - will you be charged 12 cent if say you take cash out whilst on holiday in the U.K.,U.S.A.,South Africa etc.?

Presumably yes, as long as you haven't yet reached the cap. As well as the normal fees associated with using your card abroad.

Amirani

coylemj wrote: »

That means they (Govt) will lose money so what's the point in making it more complicated than it already is?

Not necessarily, moves towards a cash less society will reduce tax evasion, eventually increasing revenue. This won't be immediate, but is likely to happen.

As regards banks having to "count ATM transactions" - are you serious?

Delta2113

http://www.irishtimes.com/business/financial-services/budget-changes-mean-customers-won-t-pay-fee-for-cashback-transactions-1.2392222

"The budget also saw Mr Noonan increase the transaction limit on contactless payment cards from €15 to €30 from October 31st." -totally incorrect -not his decision.

Fred Swanson

This post has been deleted.

nukin_futs

Nervous Wreck wrote: »

Presumably yes, as long as you haven't yet reached the cap. As well as the normal fees associated with using your card abroad.

Does anyone know if the reverse applies? A tourist visiting here uses their ATM card and gets charged the tax?

JTMan

nukin_futs wrote: »

Does anyone know if the reverse applies? A tourist visiting here uses their ATM card and gets charged the tax?

Reverse does not apply.

nukin_futs

Thanks, I would have thought that to be the case.

So as long as the cap applies we are no worse off and some people may actually save a small amount. In fact if you transfer the money to your credit card and withdraw that no charge will apply (so long as you stay above your credit limit)

Alternatively, should the cap be lifted it would be in the interests of cash users to open an account in another Euro-area country (SEPA=>free transfers, account can be managed online) and use the foreign card here as normal.

Is there any competitiveness issue with this tax? （i.e. it is now impossible to get fee-free banking with an Irish bank - probably not as stamp duty has been around for ages)

Spanish Eyes

I'm not going to worry about it for a fiver a year.

But as someone else said, the cap could be increased.

Spanish Eyes

I'm not going to worry about it for a fiver a year.

But as someone else said, the cap could be increased.

OldMrBrennan83

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BuffyBot

Spanish Eyes wrote: »

I'm not going to worry about it for a fiver a year.

But as someone else said, the cap could be increased.

So could Stamp Duty..

daheff

Spanish Eyes wrote: »

I'm not going to worry about it for a fiver a year.

But as someone else said, the cap could be increased.

BuffyBot wrote: »

So could Stamp Duty..

Its a lot easier for the Govt to say, cost per trx is no longer capped vs €5 goes to €10. It 'fools' the electorate because an actual figure isnt given. Also means that a 1c increase is easier to sell than a bigger overall amount.

I'd be very wary of this tax...its one that could suddenly be sizeable if you dont watch it.

Also my understanding of the tax is that its removing the Debit card tax (not an ATM card tax) and replacing it with a transactional tax (ie ATM card stamp duty tax remains).....means people like me who dont have a debit card pay extra taxes.

FishOnABike

Amirani wrote: »

As regards banks having to "count ATM transactions" - are you serious?

I can this causing problems our 'esteemed' politicians have not thought of.

Currently there is a flat rate tax on cards. This is easy to administer from a bank's point of view.

Banks also charge fees based on either a flat quarterly rate or per transaction or some combination of both. This is managed automatically by the banks IT systems. Banks already count ATM transactions

This transaction tax introduces a new variable charge based on card usage. Is the transaction tax only payable for ATM withdrawals or does it apply to other transactions ? Does it apply to in branch transactions using the card, cash lodgements , online payments, electronic funds transfer, card payments with cashback. Does a card payment with cashback need to be treated as two separate transactions; a card payment and a card withdrawal which incurs the transaction tax.

However the transaction tax is implemented it will require that systems are put in place to categorise transactions in a way in which they are not currently categorised, apply the required transaction tax fees to customer accounts, maintain records for revenue and pay the tax to revenue.

All banks operating in the state will have to update their banking systems software to accommodate this new tax. I hope our politicians had to foresight to realise that it is not as simple as a stroke of a pen.

JTMan

ATM withdrawals from ATM / debit cards only.

Normally the DoF consults with the industry in advance of change.

Will not apply to all banks in the state. Just banks that issue ATM and debit cards which is currently 5 banks.

Fred Swanson

This post has been deleted.

OldMrBrennan83

This post has been deleted.

FishOnABike

JTMan wrote: »

ATM withdrawals from ATM / debit cards only.

Normally the DoF consults with the industry in advance of change.

Will not apply to all banks in the state. Just banks that issue ATM and debit cards which is currently 5 banks.

True, not all the banks. I meant the public facing banks in which most of us have current accounts for our day to day living, not the corporate, merchant or private banks and Ansbachers.

It will still need software updates to the affected banks IT systems.

Will it encourage people towards counter transactions for in branch cash withdrawals? Already the queue at the counter is often shorter than for the recently introduced banking machines the banks employ people to herd their customers towards. One more straw to the camel's back in deciding which to use.

With the contactless payment limit being higher than the minimum spend shops implement for cashback I can see more people asking for cashback on relatively small purchases.

Bubbaclaus

A lot of people getting worked up over a fiver

The J Stands for Jay

Bubbaclaus wrote: »

A lot of people getting worked up over a fiver

I for one will be saving money. The joint account never has ATM transactions on it, and my own current account I only use cash when I'm in the pub and my dislike of traipsing to Tue ATM means I usually get cash back on the first round.

Amirani

FishOnABike wrote: »

True, not all the banks. I meant the public facing banks in which most of us have current accounts for our day to day living, not the corporate, merchant or private banks and Ansbachers.

It will still need software updates to the affected banks IT systems.

Will it encourage people towards counter transactions for in branch cash withdrawals? Already the queue at the counter is often shorter than for the recently introduced banking machines the banks employ people to herd their customers towards. One more straw to the camel's back in deciding which to use.

With the contactless payment limit being higher than the minimum spend shops implement for cashback I can see more people asking for cashback on relatively small purchases.

The IT systems of the banks are already equipped to count the number of ATM withdrawals on each account. I know there have been IT mess-ups in recent years, but this is something they already record by default.

FishOnABike

Amirani wrote: »

The IT systems of the banks are already equipped to count the number of ATM withdrawals on each account. I know there have been IT mess-ups in recent years, but this is something they already record by default.

But this will be additional processing on those transactions. It will still require software to be updated.

Delta2113

Immediate tip on saving €2.50 - if you have a basic ATM card then use this for withdrawing cash from ATM -max charge €2.50 rather than a full debit card - max charge €5.

The Corinthian

AlmightyCushion wrote: »

They say it's to encourage people to use cards more and cash less. Though I worry that in time they'll get rid of the cap. I try and use my card as much as possible but I pay rent in cash (Landlord prefers it that way, I'd prefer a standing order myself) and for nights out I prefer cash so I really hope they don't remove the cap any time soon.

Your landlord is the reason they want to encourage less use of cash.

Interesting, with the level of cynicism displayed here on the cap being raised before long, how little trust we have in the government anymore.