Bankers are likely to extend the period of exemption for citizens from paying bank transfer fees

Banking experts expected the Central Bank to extend the period of exemption for citizens from bank transfer fees for another six months, starting next year 2023.

They added, in exclusive statements to Al-Mal, that this measure comes in support of the process of financial inclusion and digital transformation, since the Central Bank has made great efforts in this direction, and more is expected from it in the coming period, as they expressed themselves. .

It is interesting that in June of last year the Central Bank decided to extend the period of exemption for citizens from paying bank transfer fees until the end of this year 2022, when the client can transfer his money from one bank to another for free, via the Internet, mobile banking, and network applications for real-time payment “InstaPay”.

The pricing policies include waiving all customers of the transfer fee for the first transaction per month from any mobile phone wallet to any other mobile phone wallet.

It includes setting a maximum price cap of £1 per transaction for transfers between any mobile phone wallet and one belonging to the same service provider.

The Central Bank has recommended the free issuance of electronic wallets, with the application of a pricing policy for the transfer of services for natural persons only through mobile phone wallets.

Muhammad Al-Bayyah, a banking expert, said that the Central Bank is responsible for extending the period of this exemption, adding that it is a period of about 6 months until the end of this December.

Al-Baih added, in exclusive statements to Al-Mal, that the exemption from wire transfer fees is largely compatible with financial inclusion, noting that this process limits the retention of cash by individuals and its channeling into banks.

He stated that as long as there is cash in circulation in the local market outside the banking sector, government agencies cannot determine its value, thereby affecting the national accounts, adding that the process of printing and changing “banknotes” is a huge expense for the Central Bank.

He added that among the goals of the Central Bank in the process of transformation towards financial inclusion is the saving of that cost, and that the process of cash transactions takes place electronically, via electronic wallets, and direct bank transfers.

In addition to providing each client with a mechanism that allows them to fully cope with the digital banking system.

He pointed out that the central bank’s plan for financial inclusion and digital transformation significantly contributed to the spread of electronic cards such as Visa cards and debit cards, noting that this reduced transactions with cash and helped keep it in bank cash registers.

Muhammad Al-Baih said that cash available in the market without knowing its source and without full control over it can lead to entering into illegal operations.

He expected the Central Bank to issue instructions to banks to extend the fee waiver period for the next 6 months, in continuation of its support for financial inclusion and customer incentives, in light of the existence of other systems supported by the Central Bank. that encourage free transfers, such as the “InstaPay” app.

Abdel Moneim: The goal is to reduce pressure on branches and encourage “electronic” transactions.

Mohamed Abdel Moneim, a banking expert, said the exemption from commissions and fees for electronic bank transfers aims to encourage customers to use the technologies, while reducing pressure on branches and helping to improve financial inclusion.

Abdel Moneim proposed to extend the fee waiver process for another period, like most banks in the world. Encourage clients to use modern technologies, emphasizing that in Egypt we have not yet reached the complete dependence of clients on “mobile banking” and online banking.

The banking expert pointed out that the greater the number of clients who do digital business with the bank, the less pressure there is on the bank’s branches.

In addition to the possibility of focusing on dealing with technical and electronic tools on a larger scale, which helps financial inclusion, getting used to it by more segments of society.

He added that this happened with the use of plastic cards, because users were initially afraid of doing business with them, but later got used to them and it made their banking transactions easier.

Another scenario, which Abdel Moneim believes, is that if a transfer tariff is set, it should be very low and lower than the fees when going to the bank itself, with the aim of maximizing its income.

The Central Bank’s decisions included freeing citizens of all costs for issuing prepaid cards, provided that these cards are contactless.

With the obligation of banks receiving an electronic acceptance license to waive all fees and commissions of private sector merchants on transactions that take place, using contactless payment tools issued by banks operating in Egypt.

The CBE has mandated midwives banks holding an Electronic Acceptance (E-Commerce) license to waive all fees to private sector traders from Micro, Small and Medium Enterprises (MSMEs) who wish to activate Electronic Acceptance Services (E-Commerce) per first time.

Walid Nagy, vice president of the Egyptian Arab Land Bank, said that the decision to waive fees for money transfers between banks was made during the Corona pandemic; This facilitates financial transactions that take place between clients of different banks, as well as supports the process of transformation towards financial inclusion.

Nagy added, in exclusive statements to Al-Mal, that whether the Central Bank decides to extend the fee exemption period or reinstate them, it will have advantages and disadvantages.

Noting that the continuation of the exemption will encourage clients to make more transfers, in a way to improve the process of financial inclusion, enter into more transactions within the visible economy and reduce cash, but on the other hand, it will affect the bank’s profitability.

And he continued: “But if the Central Bank decides to remove the exemption of citizens from bank transfer fees, it will benefit the profitability of the banks, but it may affect the process of financial inclusion.”

Nagi: Expected to return with a cap

The vice-president of Egypt’s Arab Land Bank predicted that fees could be reinstated, but with a maximum limit, indicating that this was what applied to “ATM” withdrawals, as £5 was set as the maximum withdrawal limit for an individual bank customer, with ATM of any other bank.

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