Banks hike ZimSwitch rates by 300%

ZimSwitch  uses will feel the pinch in transaction charges as banks have announced an astronomical rise of up to 300%.

Financial institutions agreed on an upward review of the fees to maintain ATM infrastructure, in a move analysts say could boost non-interest income for the sector, while hurting bank customers.

The past two weeks have seen banks increasing service fees for withdrawals made through the ZimSwitch platform to US$4 from US$1, while Visa cardholders' withdrawal fees on other bank's ATMs rose to 2% from 1%.

This move could discourage depositors from using the switching system, even if it boosts banks' non-interest income.

ZimSwitch, the country's sole electronic funds switch, said while it had capped its fee at US$0,30 since the introduction of the multi-currency regime, other components to the charges such as the acquirer fee, a fee charged by the bank which owns the ATM and the issuer fee, charges by the bank which owns the credit card - had been reviewed over the years in line with the operating environment.

Stanbic last week announced that its services charges for withdrawals had shot up to US$4 from US$1, but was quick to say this would have no impact on non-interest income.

"This increase applies to all ZimSwitch member banks for the maintenance of ATM infrastructure. The increase has no impact on income," the bank said in a written response to the Zimbabwe Independent.

Other banks have been in the past week issuing notices to the same effect.