Fees for EFTs and ITFs to Decrease?

Then there are fees associated with Instant Funds Transfer and Electronic Funds Transfers. According to the Governor of the Central Bank of Belize, Kareem Michael, domestic banks have given a verbal commitment to reduce the charges on using EFTs and IFTs. And to show the Central Bank’s commitment, Michael said that the bank will no longer charge twenty-five cents for EFTs and IFTs.

Kareem Michael

Kareem Michael, Governor, Central Bank of Belize

“Well, we’ve also received a verbal written commitment. I call it an indicative commitment from the banks that they will also bring down what they charge customers for the instant funds transfer and also the elect electronic transform funds transfer. So those mobile transactions, digital transactions that you engage across the APS system that used to be two dollars and above. That now,  we have received a commitment also that banks are willing. I, I shouldn’t say commitment. That banks would be willing to lower that to a dollar, below a dollar. Now, driving that is also that the Central Bank, this is a fact that come the 1st of January, the Central Bank will no longer be taking 25 cents or 50 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 that we are making here. It’s not firm as a practice direction which is a regulation by a different name. So there are no penalties should they not change the pricing or the charges tied to IFT, EFT. Right. So, but if practice direction isn’t followed on the 2nd of January, all things considered, all things remaining the same, then there is recourse that the Central Bank can take action that the central bank can take. 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 APS. Remember there’s check clearing portion as well and real time gross settlements, which are for the larger payments, over 50, 000. Combine, I think, the Central Bank in terms of revenue for 2023, above a million dollars. So that’s just over 25 cents. Right, so if we’re taking off all of that. We haven’t fully recovered for that 8 million investment. Right. 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, because the mandate of financial stability far exceeds that recovery of 8 million dollars. So, we will be losing a large portion of that million because the ACH and the IFT are the higher volumes ones so far, even though RTGS and check clearing has a higher cost. But a large portion of that 1.2 would be lost.”