STRATEGIC PARTNERS
January 31, 2002
AUSTRALIA -- According to ZDNet Australia, Australia's big four banks are refusing to commit to a timeframe for introducing real-time disclosure of electronic banking fees, despite an inquiry finding they should do so.
The Australian Parliament's Corporations and Securities Committee recommended that real-time disclosure for electronic banking fees, including Internet, telephone and ATM fees, be established within two and a half years.
Liberal Senator Grant Chapman, who led the committee's inquiry, said up-front disclosure is important because "there's no other service where people purchase something where they don't know the amount they're going to pay."
Noting that "electronic banking is here to stay," he added, "It's essential that customers are fully informed about the cost of each and every transaction before it is undertaken, so they can exercise choice about which bank offers the best deal for them."
Banks claim that real-time disclosure is not possible in the near future because of technical difficulties and costs. However, banks say they are working with the Australian Securities Investment Commission (ASIC) Transaction Fee Disclosure Working Group to find a workable solution.
The ASIC believes it may take between three and five years to implement such an initiative, according to Senator Chapman.
"The Committee accepts that there would be substantial costs if real-time disclosure was introduced immediately, but we also emphatically find that a five-year delay would be quite unacceptable," Chapman said.
Australia's largest banks, including National Australia Bank, claim to support the disclosure concept but say several issues need to be addressed, including lengthening the wait time at ATMs. According to National Australia Bank (NAB) representative Brandon Phillips, "waiting times at ATMs could become quite extensive" with disclosure.
NAB says that it discloses transaction fees on its customers' regular account statements. Furthermore, Phillips said that more than half of NAB's customers do not pay any transaction fees.
However, according to Senator Chapman's inquiry, some banks could only claim that 30 percent of their customers did not pay transaction fees.
The Commonwealth Bank said it intended to placed notices on its ATMs "as soon as possible" warning non-Commonwealth customers they would incur a fee if they used the machine. Another bank, Westpac, said it supported the issue "in principle."
The Committee also recommended that all interchange fees between banks in relation to foreign ATM transactions be abolished immediately in favor of a direct charging model. This would reduce foreign ATM fees from approximately Australian $1.50 to 50 cents and increase competition in the banking arena, according to Senator Chapman.
The Committee said it was confident that market pressure brought about by disclosure would lead financial institutions to reduce fees for electronic transactions, thus eliminating the need for government regulation.
