ECONOMY

Banks reconsidering charges

Feeling the heat from an inquisitive Competition Commission, Greek banks are said to be preparing drastic cuts in their commission charges in the transactions made among them. The commission is currently discussing the issue and there are the first indications of the banks’ willingness to compromise since they have been officially warned that they may be facing charges of forming a cartel. The cuts, estimated to be of up to 50 percent, will be put into practice within the framework of reductions in commission charges throughout the European Union, on Visa and Mastercard payments as well as for cash withdrawals from ATMs of banks other than the holder’s. They will also concern the commissions that banks charge each other. The cuts are seen as contributing to a reduction in the charges ultimately paid by consumers who use the interbank cash withdrawal system DIAS. Even though banks during the commission’s hearings claimed in several instances that they shoulder the costs of cross-bank withdrawals, as in the case of Proton Bank which has waived charges, the cuts should lower costs throughout the system. According to data compiled by the Competition Commission, banks’ income from such transactions varies from between 77 euro cents and -2.79, at an average of about -1.50. A reduction to 1 euro would harmonize the charges with those of Visa and Mastercard throughout the rest of Europe. The banks also argue that cash withdrawals from the ATMs of their peers through DIAS represent 11 percent of the total, or -17 million out of -157 million every year. During the hearings, the banks’ main argument was the high cost of maintaining their ATM networks, which, for a large bank, exceeds -50 million annually. This sum includes a variety of costs, including the transportation of money and stocking cash machines. Such costs are highest in the case of small islands, where the cost of transportation rises from -16.50 within Athens to -1,200 for the Cyclades and -1,800 for some Aegean islands. Banks also claim that sums of cash idling in ATMs for three to four days in some cases amount to -100,000 to -200,000 in tied-up money, representing another important cost item.