First National Bank (FNB), a division of the FirstRand Group, on Thursday tabled a bold industry proposal that would save customers more than R500-million annually in Saswitch fees.
The bank is seeking guidance from the Competition Commission, which is currently conducting an enquiry into banking, on how best to achieve this goal.
FNB believes the extensive ATM network in South Africa could be used more efficiently if the Saswitch fees, paid by customers for using another bank’s ATM, were eliminated.
Customers could then use any bank’s ATM, without paying the Saswitch fee. FNB believes this would enable the industry to broaden national access to banking services and achieve more efficient utilisation of the ATM infrastructure.
These benefits would be passed onto customers in the form of savings in Saswitch fees, estimated at over R500-million annually across the banking sector. Under current competition law, banks may not discuss consumer-pricing issues with each other with the view to fix, reduce or eliminate such pricing.
“We support the Competition Commission enquiry into banking because it gives us a platform to engage stakeholders on improving the efficiency and competitiveness of the industry,” said FirstRand Bank CEO Sizwe Nxasana.
“This inquiry, which examines all aspects of competition in banking, is an open process that presents a unique opportunity to table this type of proposal,” says Nxasana. – I-Net Bridge