South African commercial banks have scrapped charges when withdrawing money from another bank’s ATM – known as Saswitch fees – during the national coronavirus lockdown.
The Banking Association of South Africa (BASA), said banks have agreed to subsidise the cost of using the Saswitch network.
The Saswitch network allows people from one bank to use an ATM of another bank to withdraw cash.
This normally comes at a cost to consumers, as there is a fee charged by the bank which owns the ATM to get the money from the other bank.
This Saswitch fee is reflected in the difference in the fee which you pay to withdraw money from your own bank’s ATM and that of another bank.
The decision to waive all Saswitch fees during this period is good news for consumers, but some people feel these fees should never return.
MonteGray Capital founder and former FNB CEO Michael Jordaan said the waiving of Saswitch fees should be made permanent.
Jordaan’s comments are not surprising given that he was behind an industry proposal made to the Competition Commission by FNB in 2006 to scrap Saswitch fees.
This proposal was backed by Absa and Nedbank, which said scrapping these fees will make it more affordable for unbanked people to get accounts and use ATMs.
Standard Bank, however, was against the proposal. It said this decision would be prejudiced against the bank because it had a smaller ATM network than FNB and Absa.
The scrapping of Saswitch fees did not happen, and 14 years later, South Africans are still paying high prices when withdrawing money from another bank’s ATM.
