ASB joins move to cut Eftpos fees

By KEVIN TAYLOR

Competition is driving down the Eftpos fees some banks charge.

ASB Bank will cut the electronic transaction fee of its Streamline account from 20c to 15c on Monday in response to WestpacTrust's Elect account, which has had a 15c Eftpos fee since it started in February.

WestpacTrust claims the Elect account has been a great success.

ASB Bank and WestpacTrust fees are half those of state-owned Kiwibank's Now account, which charges 30c for each electronic transaction.

WestpacTrust has signed just under 20,000 customers to the Elect account so far, half of them new to the bank.

The ASB Bank's general manager of marketing, Barbara Chapman, would not give figures on the number of Streamline accounts opened, but she claimed it was as successful as Elect.

"It's an aggressive game," she said.

"It's an aggressive part of the market and one we are very serious about."

Chapman said the move by ASB Bank to cut its fees was not the start of an Eftpos fee-price war.

WestpacTrust spokeswoman Jane Anderson would not go that far either.

She said WestpacTrust welcomed the ASB Bank's move because it showed competitors were following WestpacTrust's lead.

"It's good for New Zealand, it's good for business, and it's good for the economy generally," she said.

The account was introduced mainly to cut the amount of expensive cash handling in the economy.

New Zealand has an Eftpos terminal for every 45 people.

"New Zealanders are the most advanced electronic bankers in the world by far," Anderson said.

"We love Eftpos, and Eftpos use has increased exponentially, but in the last couple of years it had started to plateau."

She said the bank found that customers were trying to avoid fees, which was why they preferred cash over Eftpos for low-value items.

WestpacTrust believed Eftpos use was starting to rise again.

When the bank started Elect, it denied that the new account was a competitive response to the arrival of state-owned Kiwibank.

Kiwibank chief executive Sam Knowles said its 30c Eftpos fee could not be taken in isolation.

The bank was still committed to maintaining fees for the average family at 30 to 50 per cent lower than competitors, he said.

The bank's accounts did not have the monthly management fees and other charges that other banks had.

In January, ANZ started a low-fee account called Connect 10 which offered the first 10 money Machine and Eftpos transactions a month free. The charge beyond that was 60c a transaction.

ANZ also denied that this was because of impending competition from Kiwibank.