Credit and debit card charges are falling for Irish banks tomorrow - but will these savings be passed on?

In some cases card providers' fees will be halved

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Martin Keene / PA

The various charges levied by the major credit card operators, Visa and Mastercard, on the financial institutions providing credit cards in Ireland, are changing from tomorrow, with many being cut as a result of EU pressure.

For instance, the charge, known as the base cost, for personal credit card transactions will fall from 0.55% to no more than 0.3% while the charge for debit card transactions will cost no more than 0.2%.

In theory these reduced charges should be passed on by the credit card processors to the thousands of retailers around the country that are contracted to them and then on to consumers.

Tom Galway, Chief Executive of Credit Card consultancy firm, Card Fox believes the savings to a busy convenience store could amount to between €500 and €1,000 per month.

However, he warned Breakfast Business that very few retailers are aware of the reduced margins because the credit card processors haven’t told them.

"The opportunity here really is for businesses to make sure that these savings are passed on by the acquiring banks to the businesses themselves - who can then pass them on to the consumer, through lower prices," he told Newstalk.

"The theory is that everyone is a winner - but in operation it will mean that businesses will need to negotiate to have these reductions in costs passed on to them," he added.

Mr Galway estimates that 99% of retailers are unaware of these changes.