06/04/2023
20121 times read
06/04/2023
20121 times read
Fee for each transaction ranges between 0.05 and 0.15 percent
KUWAIT CITY, April 6: Discussion has recently opened about the possibility of increasing the commission rates applied to merchants’ points of sale devices, and the application of new ones related to purchases made through the credit information network card “KNET”, noting that banks do not apply it yet and no commission on Knet payments, reports Al-Rai daily. Informed sources quoting banking sources pointed out that with the increased use of digital payment technology in the local market, foremost of which is the “Apple Pay” service, banks are facing an additional operational cost, as “Apple” imposes fees on purchase payments made through its service, even if the process is carried out with a “KNET” card. It is a percentage borne by the banks.
The sources explained that the fee collected for each transaction ranges between 0.05 and 0.15 percent, in addition to the additional operational fees applied by “Visa” and “MasterCard” to merchants’ payments collected through their cards, which raises the fee borne by banks, according to sources, to about a quarter of a percent, indicating that any increase in the commission for purchase payments to merchants comes to compensate for the additional expenses that international companies have recently introduced on payments made through cards bearing their logo. The sources noted that card officials in local banks have discussed the possibility of reviewing the list of commissions imposed on merchants who use point-ofsale devices to collect payments for their sales. To clarify, banks obtain from merchants a rental value for the POS devices that they use in their sales operations, which are fixed amounts whose value varies from one merchant to another, and their average usually ranges between 7 to 20 dinars per month. As for commissions, there are two types.
The first is related to purchases through “Visa” and “Master Card” cards, where the percentage reaches 3 percent, while this percentage increases if the payment process is made to the merchant outside Kuwait, and banks do not impose any fees on the purchases that take place. Through “Knet” cards, and here the discussion is growing in terms of banking. After the application of modern payment services such as “Apple Pay” and “Samsung Pay”, the sources indicated that the situation continued as it is in terms of banks not collecting additional fees from merchants for purchases made through modern payment services, indicating that this did not exempt banks from paying the fee owed to “Apple” and “Samsung”, which prompted banks to reconsider the commissions they collect from merchants on payments made via “Visa” and “MasterCard” cards, in addition to adding “KNET” payments to the list. The commission collected from these operations is divided between 3 parties, namely “Visa” or “Master Card”, the card issuer “the bank”, and finally the intermediary company in Kuwait, which is the credit information network “KNET”. The sources stated that the banking novelty that may occur in this regard is not the increase in the commission applied to merchants’ operations via “Visa” and “MasterCard” cards only, as the increase procedure may expand to include all payment operations that bear the logo of the two international companies, knowing that the consumer will not bear this commission, whether applied in accordance with the current regulations, or in the event of approval of its amendment and increase in its percentage.