MNB: Financial transaction duty not affect payment habits

“Despite the increased costs engendered by the introduction of the transaction tax, there was no large-scale, rapid adjustment in the payment habits of economic agents in 2013,” the report states describing the payment system of Hungary. The report also noted that the lack of a “pronounced adjustment” was true for both retail and corporate clients.

The duty on financial transactions was introduced at the start of 2013 and was further raised later that year. Banks may pass on the cost of the financial transaction duty to clients if the contracts state the possibility to make unilateral changes for modifying the fees.

According to the report, banks passed on the cost of the financial transaction duty gradually. Although the majority decided to pass on the costs directly and completely to the clients, for card payments, the cost was priced indirectly covered by annual card fees. The MNB said the pricing of payments was expected to change further as a result of the introduction of mandatory free cash withdrawals this year and a reduction in interchange fees.

From this year, banks are required to offer clients two cash withdrawals a month, free of charge, up to a combined HUF 150,000. Fixed cost payment charges had increased significantly. A crackdown by the central bank on consumer protection violations could ease the burden of fees borne by clients.

The report also noted that the transformation of Hungary's savings cooperative sector in 2013 had no negative impact on the operation of payment systems. An integration of the savings cooperatives was launched under a government mandate last year.