Customers to pay more for better banking services

  • 2000-03-02
  • By Kairi Kurm
TALLINN - Thousands of Hansapank clients were surprised last week by the bank's new Internet service prices. Hansabank announced on Feb. 22 that beginning April 1 they will charge private clients 3 kroons ($0.19) on every Internet transaction and increase the monthly payment for debit cards by 50 percent.

Uhispank clients read the same day in the newspaper Aripaev that Uhispank's vice president, Jurgen Lamp, is planning to start charging for withdrawals from automated teller machines (ATMs).

Estonia has so far had one of the larger shares of Internet banking clients, and Internet banking services have always been free of charge for private clients. The number of services, products and official applications available on the Internet is increasing every day. Even the Estonian Tax Board started accepting income tax declarations through the Internet on March 1, and this service is free.

Hansapank explains the new fee with the improved quality of their services.

"We have offered Internet banking services free for three or four years now. The product has developed a lot during that time and it has a very high value. It is more functionable and has a better quality," said Raul Parusk, retail banking director at Hansapank.

Hansapank is planning to increase the monthly debit card payment from 10 kroons to 15 kroons.

"Hansapank has been charging the same fee for debit cards since the very beginning although the number of automated teller machines and terminals has increased tremendously. People can make more transactions with their cards now. They can pay with it in payment machines on the streets," said Parusk.

Hansapank has about 585,000 debit card owners, but not all of them have to pay the same monthly payment. He said that youngsters under 25 as well as elderly people above 60 years old have smaller fees and Internet services are still free for them.

According to Parusk, monthly payments are more profitable for the bank than Internet fees, but he could not say exactly how much revenue the new fees make.

Hansapank has about 78,000 private Internet bank users. Each client makes an average of two or three transactions per month. The companies have been charged for Internet services since the beginning of the year.

The bank explained the new price list then with the decrease of transaction fees the bank received from its offices. Transaction fees usually make up a big part of the bank's revenues. Almost 80 percent of the transactions are made through the Internet now and the number of offices have thus been decreased. Effective April 1, local transactions in local currency will cost 25 kroons up from 15 kroons.

Parusk said that a bank always leaves an alternative to a client. "Transactions through payment machines and through direct debit are an alternative, which is free of charge," said Parusk.

Uhispank clients do not have to pay for Internet services. Uhispank has a total of 35,000 Internet banking clients.

"We are not planning to charge for the withdrawal of money from ATMs nor for Internet services at least during the next couple of months," said Eero Raun, spokesman for Uhispank. "We will see how Hansabank is doing after April 1 and then analyze whether we need the fee or not," said Raun.

He said that the vice president's statement in the newspaper was just an idea for a long term perspective. Uhispank's vice president Jurgen Lamp said in the newspaper that the cost of maintainance of ATMs is very high, and thus, charging clients for ATM services is normal.

Parusk from Hansapank explained that the most expensive tasks in maintaining an ATM are transport, communications and security. The machine itself costs about 400,000 kroons but the monthly costs are more than 10,000 kroons. Hansapank has about 350 and Uhispank 200 automated teller machines in Estonia.