Proposed changes to EU regulations could see Irish cardholders pay an extra €107m ($145m) a year in fees, according to a report.

The report, commissioned by MasterCard and carried out by economist Anthony Foley, says the EU measures would affect 90% of cards issued by Irish banks. The proposed regulatory change, a cap on interchange fees, would see a shortfall of €107m in the funds used to run the Irish card payments system.

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Foley said: “The most important fact arising from the analysis is that over €100m annually will be withdrawn from the Irish electronic payments system, over €500m in five years.

“It is very difficult to assume that such a large withdrawal would not have an adverse effect on the aim of bringing the payments system to best international practice.”

The cost of covering the shortfall could result in extra charges of €89m for Irish credit card users and €18m for debit card users – or €42.50 per credit card and €4.60 per debit card.

Foley said: “The current EU intention to reduce interchange fees is clearly inappropriate for current and near future Irish economic and banking circumstances.

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“The Government should not support the proposed regulation without first undertaking a comprehensive analysis of the possible consequences on consumers, bank revenue and the wider economy.”

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