||Central Bank Of Barbados
The Central Bank of Barbados is aware of complaints made by customers of domestic banks and credit unions of increased fees for debit card transactions as these institutions transition from the Caribbean Integrated Financial Services Ltd. (CarIFS) automated debit switch that links ATM machines and POS terminals across Barbados to the Visa/Mastercard platforms.
The Bank recognises that these fees do raise the cost of banking services and considers that high fees for the use of digital banking services may serve to undermine national efforts to reduce the use of physical cash and increase reliance on digital transactions.
The Bank has reviewed the fees that banks charge each other as proposed by Visa and Mastercard. Following discussions with the banks and credit unions, the Bank has therefore decided to intervene in the pricing of debit card transactions. This initial intervention is intended to:
- Standardise the interchange rate for Visa/Mastercard debit card transactions; and
- Cushion the impact of the increased fees on depositors and the business sector.
The Bank will continue to monitor the impact of these fees and reserves the right for further intervention.
Further, the payments system is being modernised, including through the implementation of a real time Automated Clearing House. This should create the potential for adoption by financial institutions of other more cost-effective solutions and the Bank will seek to incentivise their early adoption. At the same time, we encourage financial institutions to provide education to their clientele so that prudent choices about low cost services can be made.
The effective date for implementation will be November 1, 2021 but some banks may continue to operate on CarIFS beyond that date.