Cheque charges must rise

Press, 28 December 1978, Page 4

Cheque charges must rise

Wellington reporter

The price charged by trading banks for cheque services cannot be expected to last much longer, according to the chief manager for New Zealand of the Bank of New South Wales (Mr F. A, Schulte). The cheque-handling system available to trading bank customers was perhaps the cheapest in the world, he said.

Per head of population New Zealanders probably wrote more cheques than anyone else in the world, he

said. A yearly average of just less than 100 for every man, woman, and child. About 300 M banking transactions took place every year in this country. For $2.60 a year a trading bank maintained a customer's cheque account, allowed him or her to have 200 entries pass through the accounts without additional cost; prints and provides the customer with cheque books free of charge (stamp duty is passed to the Government); provides and posts out printed statements of the account and provides instant information.

This charge has stayed the same for 11 years in spite of the increase in the cost of servicing accounts, Mr Schulte said. Since the current charges were fixed in 1967, transactions had increased ten-fold. This had created its own processing problems for the banks, he said. During this time consumer prices had trebled. It was significant that the Government had made its own trading departments — postal, telephone, power, and rail — increase their charges on a “user pays” basis. The trend overseas for

bank charges on cheque accounts was towards the “user pays”' system, with some rebates given to funds in their accounts. In Canada, a personal cheque accountholder paid bank fees of $l7 a year, and in Australia, $l3. “Income from charges has not been able to keep pace with the system’s rising operating costs and its increasing volume,” Mr Schulte said. “The 11-year static price for cheque services cannot be expected to last for much longer.”