€1m wasted on State credit cards

Ministers are wasting €1m per year on “exorbitant” debit and credit card transaction fees, it has emerged.

Departments within the Government have no limit for such commission fees, allowing card merchants to charge between 0.75% to 2.79% on transactions paid by the public for duties, services, and levies.

An urgent review of the situation has been called for by the chairman of the Dáil’s influential finance committee, Ciarán Lynch, who fears a loophole is allowing taxpayers’ money to be wasted. He said up to €1m could be savedby “imposing a uniform merchants’ fee across all areas of Government”.

“The bottom line is that we are paying above the odds,” he said. “We can and should get a better deal and that can come about by putting the charges under a uniform agreement across the areas of Government.

“In the area of motor tax, people are paying €533m a year in total, and that is seeing some €3m being paid in merchant fees. There is scope there to reduce that and ensure that we get a better deal for the State and a better deal for the citizen paying various charges and levies.

“Card rates of over 2% are high and some rates are exorbitant and need to be looked at urgently.

“There is a difference of approach from department to department, with some passing the charge onto customers and some not, but the underlying problem is that the disparity of rates ranging from 0.75% to nearly 3% is too wide and significant savings for taxpayers can be made.”

The Cork Labour TD said the finance committee would be probing the issue in the coming weeks.

“This area has been overlooked for too long, and is an obvious one for reform in public expenditure,” he said.

“What drew attention to it was evidence given when we had the Revenue Commissioners in to discuss the issue of credit card payments of the local property tax.”

Mr Lynch said action needed to be taken due to the increasing use of electronic payment methods.

“Half of those who paid the local property tax did so via direct debit or credit card,” he said. “This indicates that more and more people are electing to use electronic payment methods and this puts the responsibility on Government to make sure people are getting the best and cheapest service.”

He said the Department of Public Expenditure and Reform would need to take the lead on imposing uniform fee levels.

The Department of Jobs, Enterprise and Innovation, with rates of up to 2.7%, and the Department of Arts, Heritage and the Gaeltacht, at 2.79%, have the highest fees in the Government.

The Department of Finance was unable to comment on the issue.