Changes to the bank commission mechanism announced by the Central Bank of Iran last month were scheduled to come into effect today (Sunday). But sources say that that the implementation phase has now been postponed to later this month.
A report by Way2pay website said that the delay is largely because several banks and credit institutions are not ready to adapt to the new system. However, it is unclear whether or not the unpreparedness is related to lack of infrastructure and technicalities of the banking network.
The CBI unveiled a long-awaited fee model for transactions per which payment acquirers, shops and retailers will be charged for transactions via POS terminals.
Payments for services such as issuing bank cards, guarantee letters, cash transfers, interest-free loans and LCs are the main sources of income for banks. However, customers do not pay a fee for transactions within Shaparak Network, the domestic e-payment network. Now that is supposed to become a thing of the past and people will have to pay when using their debit cards.
Banks receiving and making payments via cards bear the bulk of payment fees because when a payment is made with a bank card, the bank receiving the payment has to pay a fee to the bank whose card is used. This was on top of the amount banks pay as rent and support fees for each POS device to payment service providers.
Unlike the past, the new system will require shops, where POS terminals are used, to pay a fee for each transaction they process.
In the new model three parties will bear the cost, namely the merchant, issuing bank and the acquiring bank even though banks are still responsible for the large portion of the costs.
Acquiring banks used to pay between 500 to 2,500 rials for each transaction. Whereas, in the new system acquiring banks will be charged 0.0005 rials as transaction fee.
CBI research indicates implementation of the new model should reduce bank costs by 48% that will instead be paid by retailers.
Based on the new formula, merchants will pay a fixed fee of 1,200 rials for transactions below 6 million rials and 0.0002 (two-thousandths) of the transaction amount up to a cap of 40,000 rials for transactions above 6 million rials.
The current transaction ceiling is 1 billion rials. Uunder the new scheme a merchant will have to pay a maximum fee of 40,000 rials for a 1-billion-rial transaction while (debit card) issuing banks will pay a fixed 240 rials for each transaction.
The CBI says almost 40% of retailers pay less than 10,000 rials per day in fees. The average daily fee for nearly 62% of the shops in the new system should not exceed 20,000 rials simply because such retailers have a high number of small transactions
However, acquirers with larger payment transactions, such as currency exchange shops, gold shops and financial service providers will be charged higher.
According to the regulator, the new model will be implemented in phases and some businesses such as supermarkets and bakeries will be exempt from the fees in the initial stages.
Per rules, lenders can charge customers proportionate to the total cost of the services they provide. However, banks have largely waived the fee over the past decades to compete in the bank-saturated market.
Talk of rewriting bank service fees has been around for years but was in limbo apparently due to the perceived negative response of the public, particularly at a time when most households at the lower end of the economic ladder are already saddled with high and rising living costs plus the tanking of the rial and by extension their purchasing power.
