The Central Bank of Barbados (CBB) says high fees for the use of digital banking services may serve to undermine national efforts to reduce the use of physical cash and increase reliance on digital transactions.
In a statement, the CBB said that it is aware of complaints made by customers of domestic banks and credit unions of increased fees for debit card transactions as these institutions transition from the Caribbean Integrated Financial Services Ltd. (CarIFS) automated debit switch that links ATM machines and POS terminals across Barbados to the Visa/Mastercard platforms.
It recognises that these fees do raise the cost of banking services and considers that “high fees for the use of digital banking services may serve to undermine national efforts to reduce the use of physical cash and increase reliance on digital transactions”.
This as the CBB added that it has reviewed the fees that banks charge each other as proposed by Visa and Mastercard and that following discussions with the banks and credit unions, it has therefore decided to intervene in the pricing of debit card transactions.
“This initial intervention is intended to standardise the interchange rate for Visa/Mastercard debit card transactions; and cushion the impact of the increased fees on depositors and the business sector.,” CBB said, promising to continue to monitor the impact of these fees and reserves the right for further intervention.
“Further, the payments system is being modernised, including through the implementation 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 incentivise their early adoption.
“At the same time, we encourage financial institutions to provide education to their clientele so that prudent choices about low cost services can be made.”
According to the CBB, the non-proprietary ATM fees will have a maximum charge of three dollars (One Barbados dollar=US$0. 50 cents) while it will be free for proprietary ATM transactions.
“The effective date for implementation will be November 1, 2021 but some banks may continue to to operate on CarIFS beyond that date,” the CBB added.
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