The Payment Association of Namibia (PAN) has entered into a settlement agreement of N$319 650 with the Namibian Competition Commission (NaCC) after being found guilty of partaking in price fixing with its members.
PAN will be paying a pecuniary penalty of N$299 650 and an additional N$20 000 for purposes of covering part of the commission’s costs arising from its investigation.
“The commission’s investigation found that PAN has contravened the Competition Act by entering into a multilateral agreement between its members which fixed the interchange fees chargeable by and between commercial banks,” says NaCC spokesperson Dina //Gowases.
In 2022 the commission started an investigation against PAN and four commercial banks, namely First National Bank of Namibia, Bank Windhoek, Standard Bank Namibia and Nedbank Namibia.
The investigation looked at possible price fixing between the four banks, particularly when it came to interchange fees.
An interchange fee is a transaction fee paid by the acquiring bank (the merchant’s bank) to the issuing bank (the cardholder’s bank) whenever a customer uses a credit or debit card to make a purchase
//Gowases adds that the commercial banks adopted the payment clearing house (PCH) card schedule.
“Card schedules, however, fix the interchange fees agreed between Namibian banks. This conduct had been ongoing for a number of years, at least since 2014 and until 2020,” says //Gowases.
According to the schedule 5C of the PCH, there will be no bilaterally negotiated interchange fees between participants and all participants will pay the interchange fee rates agreed to by the industry.
“The commission concluded that because commercial banks are competitors in the markets for issuing cards and acquiring card transactions, those same banks should not be allowed to collectively set interchange fees. Being competitors, commercial banks should independently determine their own respective fees as determined by their cost and other revenue considerations,” says //Gowases.
