The Irish Bankers Federation (IBF) has claimed the decision to harmonise charges for cross-border payments in the euro zone may force some banks to withdraw these services. "Ultimately the consumer will suffer if banks cannot afford to provide services at unrealistic rates," said an IBF spokesman.

The banks argue that the pricing of domestic and cross-border payments reflects the costs of providing these services. A statement from the IBF and the Irish Mortgage and Savings Association (IMSA) said the alignment of consumer prices was unworkable because the same economies of scale did not apply with cross-border transfers. The organisations estimate that for every 25 domestic payments processed by Irish banks, just one cross-border, euro-zone payment is processed.

"The proposal amounts to an interference with market forces that could have counterproductive consequences for the provision of payment services to consumers in the euro zone," the statement said. The IBF pointed out that consumers pay more for other cross-border services, such as travel, post and telecommunications.

One factor - highlighted by the IBF - which is unique to the Irish economy, is that bank charges are subject to price control by the Director of Consumer Affairs. Banks and building societies are required to notify and commercially justify individual proposals for new or increased bank charges.