SA Competition Commission confirms cost of unauthorised transactions

[Amethyst]

:beagle:


December 2008 - Banking enquiry report to competition commission in south africa

In Chapter 4, the Panel examines the issue of Penalty Fees confining its analysis to the fees
charged by banks to their individual retail customers when a customer’s payment order is
refused, usually due to a lack of funds. These fees, commonly referred to as “dishonour
fees”, are charged for rejected cheques, debit orders, and stop orders.

1.4 Visit to the United Kingdom
In March 2006 a delegation of the Commission visited the offices of the UK Competition
Commission and Office of Fair Trading (OFT). The meetings took place over three days from
the 21st March 2006 to the 23rd March 2006. Two half days were spent at the OFT and one
day at the UK Competition Commission.

on savings accounts, FNB reported a transaction cost of R1.80 per successful debit order, while Nedbank reported a
cost of R1.42 per successful debit order, compared with the cost of a rejected debit order of
R4.18 and R4.88 respectively. These values bear no evident relationship to the fees charged
per debit order and rejected debit order on, for example, the FNB Smart and Nedbank
Transactor accounts.

Doesnt take much to do the maths over to our banks There are currently 13.5 Rand to the pound.


Redacted version is http://www.compcom.co.za/banking/Non...lty%20Fees.pdf

[Amethyst]

Re: SA Competition Commission confirms cost of unauthorised transactions

Current exchange rates

1.80 ZAR (transaction COST successful debit order) = 0.149860 GBP

4.18 ZAR (transaction COST unsuccessful debit order)= 0.348160 GBP


The reports conclusion stated

Therefore, based on this data, we have no reason to believe that,
currently, banks would be unable fully to recover their costs ordinarily incurred in respect of
rejected debit orders (including a fair return on outlays) by means of a fee capped at
approximately R5 per dishonoured item.

5.00 ZAR = 0.416445 GBP

[Budgie]

Re: SA Competition Commission confirms cost of unauthorised transactions

Population of Southa Africa is around 45 Million.

Therefore it's probably a slightly smaller set up in terms on numbers of PCA accounts, number of direct debit transactions etc.

It could therefore probably be assumed that transaction costs in the UK should even be slightly lower than those in South Africa because of the larger volumes handled.

[Amethyst]

Re: SA Competition Commission confirms cost of unauthorised transactions

The figures also scan with the CYNtheSYS report.