National Payment Council wants lower bank card transaction fees – StMaartenNews.com – News Views Reviews

PHILIPSBURG — The National Payment Council (NPC), a platform for payment system policy dialogue focused in its second meeting in St. Maarten on ways to reduce bank card transaction fees.

The NPC is chaired by the Central Bank of Curacao and St. Maarten (CBCS). It notes that due to the use of Master en Visa cards, payments at local stores are not always processed as local transactions. This results in higher fees. The CBCS says that it is essential to create a uniform configuration of payment equipment (like point-of-sale machines) and ATMs.

Participants in the NPC are, apart from the CBCS, the Bureau Telecommunication and Post (BTP), payment service providers like bankers associations, the Curacao-based Fintech Association, utility companies, consumers and business associations.

The NPC focuses on reducing fees and card payment transactions, but the main concern of many in St. Maarten is whether there ought to be fees attached to these payments at all.

When a business opens a merchant account, the bank will charge that merchant a fee for every card transaction. Quite some merchants pass these fees on to their customers, even though their agreement with the bank prohibits this.

Once upon a time, customers used checks to pay for their purchases. Processing a paper check was a costly affair for the banks so one would think that they welcomed the introduction of digital payment systems. But no, instead they thought that charging retailers for card payments was a good idea.

Those charges are not extreme – somewhere between 2 and 4 percent, but still, they add to the costs consumers pay for their purchases. These fees create hidden inflation.

Merchants may be open about the system and tell their customers that there is an additional fee if they pay with a card. But others opt for a different approach: they include the transfer fees in all their prices. In other words, the bank charges lead to higher prices, no matter what.

Consumers obviously have choices. They could pay cash to avoid the fees, but that does not help if the merchant has already included those fees in the prices of whatever he or she is selling.

The NPC’s objective of lowering these fees is a small step in the right direction, but the ultimate goal ought to be to abolish those fees completely.

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