2015
Information on the Fee Approval Process for Credit Institutions
Update to Personal Current
Account Profiles – Consumer
Protection Directorate
Update to Personal Current Account Profiles – Consumer Protection Directorate
Update to Personal Current Account Profiles used by the Central Bank of
Ireland (‘Central Bank’) when assessing notifications under Section 149 of
the Consumer Credit Act 1995
Under Section 149 of the Consumer Credit Act 1995, the Central Bank has the
function of approving the maximum permitted level of certain charges that are
required to be notified to us by credit institutions. One part of our assessment of
these notifications involves having regard to the effect of the proposed charge on
customers and, in the case of notifications relating to personal current accounts,
the Central Bank uses a number of notional activity profiles to assist in this
assessment1.
The current profiles date back to research published in 20112. To bring the profiles
up-to-date and to implement the findings of the recent Department of Finance
review of the regulation of bank charges in Ireland3, we have introduced forward
looking contactless transaction figures, attributable to the recent entry of
contactless technology to the Irish market. We have also incorporated forward
looking changes to both over the counter (OTC) and ATM (please see below table
for explanations) usage figures to reflect projected behavioural change among
current account customers on foot of emerging automated channels. The summary
narratives of the profiles have also been updated to reflect the projected impact of
contactless transactions on each customer type.
The specific changes made to the profiles are as follows:
 The inclusion of projected contactless transaction figures as a result of the
recent introduction of this service to the Irish market;
 A reduction of OTC withdrawal and deposit usage figures by 50% based on
stakeholder feedback, which highlighted the lessening practice of manual
transactions as a result of emerging automated channels;
 A slight decrease in ATM withdrawal figures as a result of an estimated
increase in contactless usage. This is based on the hypothesis that a
customer will have approximately one less ATM withdrawal for every 24
contactless transactions; and
 Renaming of the previous Sophisticated and Unsophisticated profiles to
Electronic and Manual respectively, to better reflect the main types of
transactions used by customers within these profiles.
1
This is in addition to a number of other matters considered, as set out in the document ‘Information on the Bank
Charges Approval Process’, which describes the Section 149 process (here).
2
In 2011 the Central Bank published a paper entitled ‘A Review of Personal Current Account Charges’ outlining
research which we had carried out on the level of charges incurred by customers in Ireland on personal current
accounts (‘PCA’). The intention of this research was to:
•
improve our understanding of the overall cost to customers of running a PCA annually; and
•
help to improve our understanding of, and increase transparency around, the charging structures
within a PCA and how they differ from those in other markets.
3
In 2014, the Department of Finance produced a report entitled “Report of the Review of Regulation of Bank
Charges in Ireland’. In this report, the Department of Finance recommended that it would not be appropriate to
repeal Section 149 at that stage but did make a number of recommendations to a number of entities, including the
Central Bank. One of the recommendations made was that:
‘The Central Bank of Ireland should reform the process by which it assesses applications as part of the
Section 149 process, in particular by a) updating consumers profiles on a regular basis and incorporating
forward looking projections in them...’
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Update to Personal Current Account Profiles – Consumer Protection Directorate
In making these changes, we consulted with the National Payments Plan unit within
the Central Bank, the then National Consumer Agency (now the Competition and
Consumer Protection Commission) and the Banking & Payments Federation of
Ireland. Their input was collated, considered and, where appropriate, incorporated
into the final profiles. Nevertheless, usage figures for contactless transactions used
in these profiles are both estimated and forward looking which inevitably poses
limitations to the accuracy and time horizon. In particular, it is not known what
growth rate of contactless transactions will occur over the coming years.
It is the Central Bank’s intention to review the profiles again in 18 months, in order
to consider any updated data and customer behaviour.
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Update to Personal Current Account Profiles – Consumer Protection Directorate
Updated Customer Profiles
Charge Groups
Charge Type
No. of
Occurrences
No. of
Occurrences
No. of
Occurrences
No. of
Occurrences
Standard
Electronic
Manual
Non-standard
Day to Day Transaction Fees
Basic Charges
Quarterly Charge
4
4
4
4
Manual Transactions OTC Withdrawals
4
2
15
4
4
2
8
4
POS Debit (including online
transactions)
80
105
0
80
POS Debit Contactless
60
208
0
60
Setup/Renewal Fees
Overdraft Set up fee
1
1
0
1
Credit Transfer
Credit Transfer
11
11
0
11
28
49
7
28
47
60
12
47
3
2
20
3
Referral Fees
2
0
0
7
Direct Debit/Standing
Order Unpaid
1
0
0
9
OTC Deposits
Debit Card
Direct Debit/Standing Direct Debit/Standing
Order
Order Charge
ATM Withdrawals
Cheques
Cheques Drawn
Out of Order/Other Fees
Other Fees
Notes:
Interest Charged on
Authorised Overdraft
€1,500 for 30
days
Unauthorised Overdraft
Interest
€500 for 10 days
Duplicate Statements
€1,500 for 10
days
1
0
-
€1,500 for 60
days
-
€500 for 45 days
1
The number of occurrences above represents transaction usage over the course of one year.
Withdrawals and Deposits include cheque processing.
OTC = Over the Counter e.g. manual transactions through a cashier in a bank branch.
POS = Point of Sale e.g. debit or credit card transactions using terminals in a shop.
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2
Update to Personal Current Account Profiles – Consumer Protection Directorate
Summary of Customer Profiles
A summary of the four updated profiles is as follows:
Standard – A standard profile customer would use the majority of the
functionality available on their account. We envisage that this type of customer
would be a regular user of their online banking facility and would only occasionally
need to attend a bank branch. This customer may occasionally incur limited out-oforder charges and would be a regular user of contactless transactions.
Non-standard – A non-standard profile customer would have a similar usage
pattern to a standard customer, using the majority of the functionality available on
their account. This type of customer would be a regular user of their online banking
facility and would only occasionally need to attend a bank branch. This type of
customer utilises overdraft/unauthorised overdraft position and incurs out-of-order
transaction fees frequently. This customer would be a regular user of contactless
transactions.
Electronic – An electronic profile customer would be a heavy user of the more
automated functionality of their account. This type of customer would carry out
more transactions electronically/online and rarely use over the counter (OTC)
transactions/cheques or need to attend a bank branch. This customer would have
an overdraft facility but rarely use it. This customer would not incur out-of-order
charges and would be a high user of contactless transactions.
Manual – A manual profile customer would have more limited use of functions
than a standard customer. This type of customer would use more manual type
transactions, such as over the counter transactions, and have a greater reliance on
cheques. This customer does not have an overdraft facility and does not typically
incur out-of-order charges. This customer would be unlikely to use contactless
transactions.
Should you have any questions please do not hesitate to contact the Central Bank
of Ireland at [email protected].
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