Bank of Ireland is taking over the American Express charge card business in the Irish market in a franchise agreement with the US financial and travel services group.
But the changeover will mean that customers will pay a higher commission charge when they use the card for transactions overseas. This charge will increase from the current 1 per cent to 1.75 per cent.
A new company Centurion Card Services, which will be wholly owned by Bank of Ireland, will take over the Irish operations of American Express Card Services next month.
The 13 Dublin-based management and staff of the existing American Express Card business will transfer to the new company. Existing Irish customers of American Express will be transferred to the new company unless they inform American Express that they do not wish to do so.
If the holders of the 35,000 American Express charge cards in the Irish market agree, American Express Card Services will transfer the confidential information it holds on customers to Centurion at the end of May. Customers are currently receiving letters from American Express informing them of the changeover and asking them to write to the company returning their cards if they do not wish to continue their membership.
The new terms and conditions of card membership, currently being sent to American Express card holders, show that the conversion charge on foreign exchange transactions will increase from 1 per cent to 1.75 per cent for customers. This is a commission charge for processing card transactions carried out overseas and is levied on the amount of the transaction.
Confirming the takeover, a Bank of Ireland spokeswoman contended that the American Express charge on foreign exchange transactions was traditionally low compared with other charges in the market. The 1.75 per cent Bank of Ireland charges was about the norm and there were higher charges in the market, she said. In June, Centurion will take over the marketing of American Express charge cards in the Irish market. It is currently accepted by about 6,500 Irish retail and other outlets.
Centurion will do credit assessments on customers and transaction processing, currently carried out in Britain, will be done in Bank of Ireland's processing centre in Dublin.
"The card market is a strongly growing area and we are adding a charge card with a strong brand identity to our suite of credit cards and laser cards.
"American Express is a very good brand name with strong growth potential," according to the bank spokeswoman. American Express Card Services director, Mr Peter Egan, was not available yesterday. But the reason why the company has franchised its operation to Bank of Ireland may be because, in a competitive market, it could achieve greater penetration through being marketed by a large player offering other card services. With only 35,000 card holders, its market penetration is considered relatively low.
