As of November 1, the amount Barbadians pay for an automated teller machine (ABM) transaction other than their own will be capped at a maximum of $ 3.
Central Bank of Barbados Governor Cleviston Haynes made the announcement on Tuesday as he delivered his latest economic review for the July-September quarter.
Noting that the Central Bank was aware of complaints from residents about the high bank fees associated with debit card transactions, Haynes announced that effective November 1, a standard fee of $ 3 will be charged for using a debit card at an ATM that is not from the corresponding bank of the card issued.
In addition, he said that making a transaction at a place of business using the point of sale (POS) system will not incur a fee.
“The Bank reviewed the fees that a bank charges each other, as offered by Visa and Mastercard, and following discussions with the bank and credit unions, the Central Bank decided to intervene in the pricing of transactions. by debit card. This initial intervention aims to normalize the interchange rate for Visa / Mastercard debit card transactions and cushion the impact of the increased fees on depositors and the corporate sector, ”said Haynes.
“In terms of the rates that we’ve looked at, as you know, if you’re using your own ATM right now, it’s free and will continue to be. However, if you use another bank’s ATM, you will be charged a fee. From what I understand, these fees go up to $ 6.50. Therefore, we have indicated to banks and credit unions that these fees should be capped at a maximum of $ 3, ”said Haynes.
“Also, when you use your point-of-sale card at a merchant, some banks are free, but others have a fee. However, as of November 1, there will be no charge for using your Visa or Mastercard debit card at a merchant, ”he added.
For several months, residents have complained about high and increasing bank charges for certain transactions, in particular using an ATM.
The governor said the central bank recognizes that the current fees increase the cost of banking services, adding that it considers the high fees for using digital banking services “could serve to undermine national efforts to reduce the cost of banking services. use of physical money and increasing reliance on digital transactions ”.
He said capping ATM fees at $ 3 and no fees for swiping a debit card at a merchant was an “initial step.” He said the central bank would continue to monitor and assess the impact and could make “further intervention” if necessary.
“We have to be fair to customers both in terms of individuals, in terms of traders and in terms of financial institutions, but that’s where we are right now,” he added.
“I encourage you, if possible, to use your own ATM or credit union machine. I recognize that there are cases where some institutions do not have a lot of machines on the market and therefore the temptation to use another bank’s ATM is there, but try to plan your purchase if possible because it ‘is a service that you can get for free if you use your own bank, ”Haynes said.
He also noted that the payment system was still being modernized, including the establishment of a real-time automated clearing house.
“This should create the potential for adoption by financial institutions of other more cost-effective solutions and the Bank will seek to encourage their rapid adoption. At the same time, we encourage financial institutions to provide education to their customers so that prudent choices regarding low cost services can be made, ”said Haynes.
Banks and credit unions are moving from the Caribbean Integrated Financial Services Ltd. platform. (CarIFS) which connects the island’s ATMs and point-of-sale terminals with Visa / Mastercard platforms.
Haynes said some banks have been allowed to continue operating on CarIFS beyond November 1, when the new ATM fees go into effect.