Did you ever wonder why your bank charges so much for every transaction these days?
It is, according to the Wellington Citizen's Advice Bureau, the number one question and complaint.
But the banks aren't telling. They say it's a matter of commercial confidentiality. And the charges certainly vary. The BNZ, for example, charges 25 cents for each transaction, a smaller bank such as Countrywide 50 cents, the ASB Bank 25 cents but $2 for a teller transaction. At a certain level — if you have many thousands of dollars with the bank — the charges are waived.
In their best-selling book The Essential Client-Server Survival Guide, authors Robert Orfali, Dan Harkey and Jeri Edwards state that the cost in the US is 15 cents an electronic transaction and $2 for a teller transaction.
"Different modelling may produce a disparity between countries and within New Zealand," says BNZ spokesman Rowan McArthur. "Banks such as ourselves are moving toward making costs viable. We have to make every customer viable." He says there's no question that costs are going up where they used to be met out of surpluses from mortgage business.
The banks, of course, know to the cent what it costs them because they're all involved in interchange. And it certainly costs less now than it once did because computers are that much cheaper.
Computerworld asked former Data-bank chief executive Tony Hood how realistic the US figures were.
"I would probably not argue too much with 15 cents," he says. "But $2 for a teller transaction is a little on the high side. Those US figures are not unreasonable."
The marginal cost of an electronic transaction is less than one cent. It's a process — not a case of buying more capacity. There are some infrastructural costs, then it's very much down to the consumables. There is also the cost of buying the money for ATMs from the Reserve Bank and having it sit idle in the machine till used.
It seems, on the face of it, that New Zealand banks are subsidising any wholesale failures by making a substantial profit on electronic transactions.
But, wait a minute, isn't it these self same banks that are scrambling to get out of bricks and mortar, using technology so that people will go to machines? If you've had reason to go into your bank recently you'd be lucky for find more than two tellers working at any one time. So you join the queue.
A long-time employee of one of the major banks told Computerworld recently that there was a far more basic reason for high bank charges.
The banks don't want to cater to small accounts, particularly people on benefits, he says. There's a concerted push to get rid of them.
These, of course, are the people who can least afford the charges.