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MNB makes case for package pricing of retail payment services

The National Bank of Hungary (MNB) has argued that local banks could benefit from adopting the international best practice of package pricing for retail payment services, in an annual report released on Wednesday.

The MNB said the cost level of retail payment services in Hungary is relatively high in international comparison, accounting for 0.52% of an average clientʼs income. That ratio is well over the 0.36% average for retail bank clients across Eastern Europe, as well as the 0.16% average for Western Europe.

Retail bank clients in Hungary typically pay transaction fees that are scaled to transaction size and frequency, unlike in many other countries where clients pay a flat price depending on the type of account package they have.

Adopting package pricing practices in Hungary would support the further expansion of electronic payments, the central bank said, adding that banks "can be reasonably expected" to waive transaction fees of instant credit transfers, considering clientsʼ current high costs. The resulting boost in competitiveness would benefit banks far more in the medium term than any disadvantage from declining payment revenue, it added.

The MNB said that widely available package pricing, combined with waived transaction fees, would also improve Hungariansʼ financial savvy by creating transparency and comparability across banking products.