Greek banks: what is hidden behind high fees – subscription packages are coming

The controversy that has begun between Greek bankers on the one hand, and citizens and companies who complain about the daily burden on the transactions they carry out, is significant on the other hand.

Each side has its own arguments, while new facts, such as mandatory existence, are now entering the conversation POS For the vast majority of freelancers, but also the emergence of subscription packages from banks that are expected to “split”.

Regarding use POS, Since the beginning of the year this has become mandatory for professionals such as taxi drivers, producers, street market traders, stall and shop owners and others, a development that is expected to lead to a significant increase in payments by credit and debit cards.

For their part, small businesses say the fees are so high that in many cases it would not be beneficial for them to accept payment by card. Today, the purchase of the terminal starts from 129 euros and reaches 344 euros (excl. 24% VAT), depending on the technical characteristics.

In addition to the purchase cost and monthly support expenses, a commission is added to each transaction, with fees ranging from 0.70% to 1.25% per transaction.

Banks' pricing policy and complaints about excessive fees

As we noted, installation is mandatory POS It is now a reality for the majority of freelancers. This development makes the issue of the pricing policy adopted by banks even more important, at a time when complaints about excessive charging of fees have become audible, especially compared to what applies in the rest of Europe.

On the one hand, these complaints are certainly somewhat founded, as Greek banks have already chosen to maintain high levels of commission that they “retain”, both on incoming and outgoing transfers. Something similar also applies to direct credit transfers, or quick money transfers (instant payment). A service that is provided free of charge in most European countries.

If we convert this into numbers, it translates into an average commission that ranges in the first category from 1 to 3 euros, for amounts less than 1,000 euros, depending on the pricing policy of each bank, while the transaction takes place within a period of three days. For direct payments, the commission ranges between 2.5 and 4.5 euros.

What is true in major European countries

At the same time, what applies to the fees imposed by banks in 4 major European countries raises special interest.

Specifically, for withdrawals through another bank's ATM, the fees in Germany range from 1.50 – 2.00 euros, in France 1.00 – 1.50 euros, in Italy 0.50 – 1.00 and in Spain 1.50 – 2.00.

For outgoing wire transfers, the fee depends on the amount and varies in Germany from 0.50 to 1.00 euros, in France from 1.00 to 3.00 euros, in Italy from 0.50 to 2.00 and in Spain from 1.00 to 2.00 euros.

Accordingly, for incoming wire transfers, it is free in Germany and Italy, while in France the fees range from 1.00 to 3.00 euros and in Spain from 1.00 to 2.00 euros.

Finally, regarding the “hot” issue of POS fees per transaction for professionals, in Germany a commission of 0.30% – 0.70% applies, in France 0.50% – 1.00%, in Italy 0.50% – 1.50%, in Italy 0.50% – 1.50% Spain 0.50% – 1.00%.

Banks response

Of course, Greek bankers have their own arguments to justify their pricing policy. At the heart of this is the view that, for better or worse, banks must make decisions based on purely commercial criteria, while remaining viable in a highly competitive environment. After all, only in this way will they be able to achieve their main goal, which is to provide liquidity to the real economy, both for households and companies, while at the same time they will have the highest quality products and services in the world. Daily transactions of citizens.

This goal will only be achieved if the banking system remains sound, viable and profitable, with fees charged strictly on the basis of business standards.

“Fees are one thing, income is another.”

In fact, banks claim, they are unfairly blamed for the fees they charge as well Its income from fees and commissions lags significantly behind that of other banks in the euro area.

In fact, they assert that in a different case, if there had been greater profit margins from the distance between interest rates and commissions, there would have been greater interest in investing on the part of foreign banks.

The reality in Greece is that higher fees are typically recorded for less expensive transactions without significantly increasing the share of fee and commission income in the overall revenue mix. The European “bonds” of Greek banks depend to a very large extent on monthly contributions, while the phenomenon of negative interest rates is also common.

Entry of international “players” into Greece

in In any case, the increase witnessed by all banks’ revenues from commissions and fees coming from cards, payment systems and the network, in the past three years, is considered significant.

This particular development has attracted the interest of major international “players” who have been leaders for many years in the field of card acceptance. And so on, Euronet, Worldline, Nexi and Evo Payments groups proceeded to acquire the activities of Piraeus Bank (100%), Eurobank (100%), Alpha Bank (100%) and National Bank (51%), respectively.

Monthly subscriptions that change the landscape

It is worth noting that everything we have known can change. Specifically, our country is poised to follow the path of other European countries that have launched monthly subscription packages, while simultaneously adopting lower fees on low-cost transactions, such as money transfers and ATM withdrawals.

This strategic move is mainly aimed at customers who make regular transactions and hence will be able to save a significant amount every month. Fees are expected to start from 0.60 minutes and go up to 10 euros per month.

Among the positive developments, it is worth noting the banks’ decision to reduce – for the period – the commission by 30%. Duff Which related to a withdrawal from another bank's ATM, and then a fine of 41.7 million euros by the Competition Commission for a series of charges.