New banking charges being introduced by

Bank of Ireland to promote digital transactions do not suit small businesses that deal mainly in cash, the owner of a recently opened small Dublin cafe has said.

Christopher Keegan of Kaph on Drury Street said that 90 per cent of the customers that enter his café buy a coffee and a pastry and pay with cash. The average spend is €5.

He said that while he can understand why the bank might want to encourage the transition away from cash and cheque use, the impact on him as a small business owner was that his banking costs were going to go up “exponentially”.

A letter he received recently from the bank was headed “simpler, clearer pricing” and said it was introducing a “new transparent fee structure” for his business account.

However the new structure included a 50 per cent increase in coin handling charges and a 300 per cent increase in cheque charges.

Mr Keegan said it was common practice for businesses like his to pay staff and suppliers with cheques.

“I can understand how the bank and the Government might want to have more electronic transfers, but this doesn’t suit me as a small business and a cash business. It costs me unduly,” he said.

The new fee structure is intended to increase the cost of cash and paper banking, while making digital transactions cheaper.

The switch in the relative cost of the various types of transaction was announced by the bank in December.

Mr Keegan said he had started his business in June 2013 and now has five employees. “We are doing very well,” he said.

“Turnover is super. But with a small business you have to be very careful. It would be very easy to have a great turnover and no profit.”