OREANDA-NEWS. April 06, 2011. SEB is set to begin offering small traders more advantageous terms for card payments. SEB has also proposed to other Estonian banks that they amend their contracts and lower their agreed card payment commission fees, reported the press-centre of SEB.

“Interest in card payments has shot up since the euro was introduced, and there’s been a lot of public debate about the issue, particularly in terms of card payment fees,” said Eerika Vaikmae-Koit, head of the Retail Banking and Technology Division of SEB. “We agree with the Estonian Traders Association in that it’s small traders who are hardest hit when it comes to offering their clients the chance to pay by card. The high cost of payment terminals has forced some traders to accept cash only, and from the point of view of competition that’s the most costly way of paying for things for both the traders themselves and, at the end of the day, their clients. As such, SEB will be significantly reducing the cost of payment terminals for small traders – so as to make card payments more widely available.”

SEB has launched negotiations with other parties on the market to bring down commission fees on card payments. “Both banks and a lot of merchants subsidise cash transactions these days, even though the future of everyday settlements clearly lies in e-channels,” said Vaikmae-Koit. “Our view is that in promoting card payments it’s easier and quicker for banks and traders alike to make the transition to a more effective system of settlements – one that should save them tens of millions of euros a year, not just on handling cash, but on the working time and security that involves.”

SEB will be offering payment terminals to small traders at a cost of just 5 euros per month, regardless of the type of terminal. “To date people have been having to pay 27 euros a month for a GSM terminal, but we’re slashing that to 5 euros,” Vaikmae-Koit explained. “I’m sure that in subsidising the use of terminals in this way we will make it possible for a lot of people to start offering their clients the option to pay by card – whether they’re in a taxi, at the market or anywhere they currently don’t have that choice.”

Positive developments are also expected in terms of card payment fees. Over the last four years the number of card transactions has risen by around 20%, while fees have fallen on average by around 25%. The same trends are likely to continue in the short term. “We’ve looked at card payment fees on neighbouring markets, and the only banks offering lower fees than we currently do are those issuing bank cards which are only valid nationally – but obviously this imposes clear restrictions on the clients using them,” said Vaikmae-Koit. “In terms of the service fees you pay on international bank cards and in particular international credit cards, Estonian traders are paying much the same or even slightly less than those in neighbouring countries. But Estonia’s ambition should be to become the country with the smallest cash turnover and the best card payment options in Europe.”