Online Shoppers Could be Charged €100 Million in Fees By Irish Banks in 2022

Online shopping continues to grow at a fast rate in Ireland and Irish consumers have done even more of their shopping online since the coronavirus pandemic.

Irish banks are charging their customers millions of euros in foreign currency fees when shoppers use their debit or credit cards to purchase on non-Euro currency websites.

We estimate those bank charges could total almost €100 Million in 2022

A CSO study found that 69% of Irish internet users purchased goods and/or services online in 2020.
According to a JP Morgan report – the average Irish online shopper spends EUR2,708 a year.

According to the Central Bank of Ireland, e-commerce debit and credit card spending in Ireland accounted for over €15 billion in the first half of 2021.
(This includes retail as well as other online card transactions such as utility bills , insurance etc)

A report from JP Morgan in 2019, forecast that Irish consumers would spend around €10 billion on online shopping in 2021. (The 2022 figures willprobably be a lot bigger now because of the Covid pandemic.)

How Much of the Online Spending is Done Outside Ireland ?

According to the Retail Sector at Bank of Ireland- an estimated 70% of the total retail online spend by Irish shoppers was spent outside Ireland in 2019.

Online shopping from the UK might have reduced a bit in Ireland in 2021 because of Brexit. However , we estimate that 70% of the Irish online spending that goes outside Ireland is spent on UK ,USA ,Chinese and other non EU sites.
So we estimate that at least 50% of all Irish online retail spending is going outside the Eurozone.

Therefore, 50% of the estimated 2022 online spend of €10 billion works out at €5 billion …. possibly being spent outside the Eurozone .

Bank Charges on Foreign Currency Transactions

When paying by a debit or credit card in a non-Euro currency – the “main” Irish banks charge fees of around 2% . Some charge as much as 3%.
That could work out at a total of €100 Million in charges on a €5Bn spend over the year.

Someone spending €2000 Euro on UK websites in a year could end up paying up to €60 or more in bank card conversion fees.

(See exactly what each bank charges here)

How to Avoid Bank Currency Charges

Fee Free Debit Cards

N26 is one online bank available in Ireland that provides a debit card without any foreign currency spending fees.

Another popular debit card is also available in Ireland from Revolut .
It has no fees on the first €1000 a month in non-Euro currencies. (0.5% after that)

The Wise multi-currency account comes with a debit card and a smartphone app . There are small fees for transfers and spending (about 0.3% to 0.4%) . But the card exchange rate at Wise is usually slightly better than normal Visa/ Mastercard rates.

Avoid The Amazon Currency Converter

Some people in Ireland may think they can avoid or reduce currency charges by paying in Euro on sites such as Amazon. But the exchange rate used by Amazon’s currency converter will end up costing you more than paying in Sterling.

A real example from June 2019.

Order total on Amazon UK = £512.49 GBP
Amazon converted that to €598.63 Euro.
But if you opted to pay in Sterling – with a Euro Visa Debit card you would end up paying just €577.45. (Plus card fees) . Even with a 2% card fee, it would cost just under €589 (a saving of over €9)

Avoid Using Paypal

Using Paypal will work out more expensive than a debit card when it involves a currency conversion. If you are buying in Sterling and have Sterling in your Paypal account – then using that to pay will be fine.
But if you need to convert Euro to Sterling with Paypal you will typically get a worse rate than Visa or Mastercard.

A Real example : (Using a Sterling balance on Paypal to buy in Euros)
A purchase costing £1587 Euros paid with Paypal Sterling balance ended up costing £1458 GBP .
On the same day ( May 27th 2019), if you used a Visa debit card with a 2% currency conversion fee capped at €11.43 – it would have cost £1416. A saving of £42.
If the Visa card had no currency fee (N26 for example) – it would have cost just £1405 GBP – a saving of £53 pounds !

Summary :

If you want to avoid contributing to the estimated €100 Million of currency charges to banks in Ireland – then you need to know – What is the cheapest way to pay online?

  • Do Get a debit card that does not charge fees on spending in a non Euro currency.
    • N26 and Revolut are the two most popular in Ireland. Why not get both ?
      See our comparison of Revolut and N26 here.
    • The Wise multi-currency account comes with a debit card and a smartphone app . There are small fees for transfers and spending (about 0.3% to 0.4%) . But the card exchange rate at Wise is usually slightly better than normal Visa/ Mastercard rates.
  • Don’t use Amazon’s currency converter – it will work out more expensive than using your card (even if your card adds fees).
  • Don’t use Paypal to convert currency when purchasing in non-Euro currencies – it will always be more expensive than using your debit or credit card.

A Detailed Comparison of Current Bank Account Charges in Ireland

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