Central Bank Forgoes $1 Million to Reduce Online Transaction Fees

At the top of our newscast, we told you that with the reduced banking fees for next year.  Negotiations with the commercial banks have resulted in the Central Bank giving up its cut of fifty cents for every online transaction made through its Automated Payment and Securities Settlement System (APS3) digital platform. Central Bank Governor Kareem Michael said that the CBB stands to lose just over a million dollars, but the benefits to the public outweigh that loss.

Kareem Michael, Central Bank Governor: “Come the first of January at the Central Bank will no longer be taking twenty five cents or fifty cents from those online charges. We are putting that at zero. So the Central Bank collects nothing further for electronic funds transfer, instant funds transfer. Why ? Because we believe as the evidence has shown that it drives positive financial inclusion and therefore enhances financial stability mandate. That is the connection we’re making here. The investment in the apps system so far for the Central Bank so far has been in excess of $8 million dollars and we did this project 2016. Our year to date for 2023 in terms of what the Central Bank has collected correct me if I’m wrong again and this is only a component of apps remember there’s cheque clearing portion as well and real time gross settlements which are for the larger payments over $50,000 etc. Combined I think the Central Bank in terms of revenue for 2023 above a million dollars. So that’s just our twenty five cents. So if we’re taking off all of that we haven’t fully recovered for that $8 million investment but if you go back to financial stability being a public good and the regulator playing this critical function within the financial system then this should not be an issue for the Central Bank at all.”

While the CBB spent eight million dollars on the APS platform back in 2016, it did not begin charging for transactions until 2018, which was cited as one of the reasons the eight-million-dollar investment has not yet been recovered