Stan­dard Bank to re­view charges on petrol pur­chases via credit cards

Weekend Argus (Saturday Edition) - - GOODFARE - AN­GELIQUE ARDÉ

Fol­low­ing Per­sonal Fi­nance’s lead story last week – which looked at meth­ods of pay­ing for petrol and the as­so­ci­ated costs – Stan­dard Bank says it is re­view­ing its po­si­tion on the fees and in­ter­est it charges clients who use a credit card to pay for petrol.

Per­sonal Fi­nance re­ported last week that the big four re­tail banks, in­clud­ing Stan­dard Bank, all treat petrol pur­chases on a credit card like any other re­tail pur­chase: in other words, there is no trans­ac­tion fee and clients en­joy the usual in­ter­est-free pe­riod ap­pli­ca­ble to their card.

How­ever, in re­sponse to the story, read­ers who bank with Stan­dard Bank re­ported that they are charged trans­ac­tion fees and in­ter­est from day one when pay­ing for petrol with their credit cards.

Although the in­for­ma­tion car­ried in last week’s story was supplied and checked by Stan­dard Bank be­fore pub­li­ca­tion, it was in­cor­rect.

In fact, Stan­dard Bank charges a trans­ac­tion fee of R3.85 and in­ter­est from the time of pur­chase when you buy petrol on your credit card.

Su­gendhree Reddy, the di­rec­tor of bank­ing prod­ucts at Stan­dard Bank, says that “no one at the bank knew” that charges and in­ter­est ap­ply to fuel pur­chases on the bank’s credit cards.

She says queries by Per­sonal Fi­nance read­ers have “raised a red flag within the bank”.

“We ac­knowl­edge that fuel pur­chases on a credit card are treated as a cash ad­vance, mean­ing we charge a trans­ac­tion fee and in­ter­est from the trans­ac­tion date. But Stan­dard Bank is re­con­sid­er­ing its po­si­tion. We would have to make sys­tem changes, which take time, but by the end of Jan­uary we would like to have rec­ti­fied this,” Reddy says.

The Pay­ments As­so­ci­a­tion of South Africa (Pasa) is tasked with en­sur­ing that South Africa’s pay­ments sys­tem is world-class and aligned with the South African Re­serve Bank’s poli­cies and prin­ci­ples in re­spect of the National Pay­ment Sys­tem.

Ac­cord­ing to Pasa, “a fuel pur­chase must be treated as a re­tail pur­chase” and not as a cash with­drawal, Arif Is­mail, the ex­ec­u­tive of pay­ments strat­egy, re­search and com­mu­ni­ca­tion at Pasa, says.

But Pasa does not reg­u­late pric­ing – it is up to each bank to de­cide what it charges for a re­tail pur­chase, Is­mail says.

Typ­i­cally, banks do not charge clients a swipe fee for pur­chases on a credit card, and Stan­dard Bank’s charge for fuel pur­chases on its credit cards ap­pears to be the only anom­aly.

Per­sonal Fi­nance con­tacted Absa, First National Bank ( FNB) and Nedbank again this week to ver­ify the ac­cu­racy of in­for­ma­tion supplied for last week’s ar­ti­cle. All three banks con­firmed that they treat petrol pur­chases on a credit card as reg­u­lar re­tail pur­chases and not as cash with­drawals.

THE LAW

The law no longer pro­hibits petrol from be­ing sold on credit.

In July 2009, the Depart­ment of En­ergy in­tro­duced a reg­u­la­tion un­der the Pe­tro­leum Prod­ucts Act al­low­ing for the use of pay­ment cards to pay for petrol prod­ucts.

Up un­til the reg­u­la­tion was passed, South Africa was one of a few coun­tries in the world which pro­hib­ited the buy­ing of fuel on credit, “and it was an ab­sur­dity”, Tony Twine, a se­nior econ­o­mist and di­rec­tor of Econometrix, says.

“The reg­u­la­tion ( 9117) does not force the banks to treat petrol sales as ex­ten­sions of cash credit,” Twine says.

IN­FOR­MA­TION

Get­ting clear and ac­cu­rate in­for­ma­tion from the banks is not easy. Be pre­pared to mine your bank’s web­site and brave its call cen­tre. Call cen­tre staff are of­ten not ad­e­quately in­formed. An op­er­a­tor at FNB card divi­sion yes­ter­day gave in­ac­cu­rate in­for­ma­tion – checked by his su­per­vi­sor – to Per­sonal Fi­nance tele­phon­i­cally and via email.

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