Customers are reportedly showing preference for faster, more convenient and cost-effective banking solutions.
JAMAICANS who rely on in-person banking are facing steeper costs this year, according to new central bank data, as major institutions hike fees for branch transactions while keeping digital payments largely unchanged — a move that could be designed to push customers toward online services.
The Bank of Jamaica’s latest Schedule of JamClear-RTGS Transaction Fees reveals a widening gap between fees for branch and digital banking services across the island’s financial institutions. This trend is particularly evident in the practices of major banks like National Commercial Bank Jamaica Limited (NCB) and Victoria Mutual Building Society (VMBS).
NCB, Jamaica’s largest bank, has increased its personal branch transfer fees by 14 per cent, from $1,400 to $1,600, while digital fees rose by only seven per cent. The bank has also introduced a $95 fee for corporate incoming transfers that were previously free.
Defending these changes, NCB, in written responses to
Jamaica Observer queries, explained, “The adjustments to our fees reflect the rising costs of providing secure, high-quality banking services while ensuring long-term sustainability. We have sought to keep fees manageable while balancing the costs of in-branch services with the affordability and efficiency of digital banking options.”
VMBS has implemented a tiered pricing structure that charges $895 for branch transfers below $500,000, but only $550 for larger transactions. When questioned about this 62 per cent premium for smaller transactions, VMBS stated, “A higher fee is charged on amounts under the online banking limit of $500,000 as the customer has the ability to conduct the transaction online, at a smaller fee of $200.”
This push towards digital banking is not without reason. NCB reported a significant shift in customer behaviour, with 98 per cent of all transactions now conducted through digital channels, up from less than 30 per cent in 2017.
“This transformation is driven by customers’ preference for faster, more convenient and cost-effective banking solutions,” the bank noted.
However, concerns remain about the impact on elderly, low-income, and vulnerable customers who may rely more heavily on branch services. NCB addressed this by highlighting its Gold Club Account for customers 55 and older, which allows fee-free, in-branch withdrawals and transfers. Both NCB and VMBS emphasised their efforts to assist customers in transitioning to digital banking, offering one-on-one guidance and in-branch kiosks for online banking registration.
The trend towards higher branch fees is not limited to these two institutions. The Bank of Jamaica data show that the average branch outgoing transaction fee across all institutions increased to $1,071.04 as of December 31, 2024, compared to an average online outgoing fee of $213.58.
This shift in fee structures comes against a backdrop of broader economic changes. The Bank of Jamaica has been gradually reducing its benchmark policy rate, which stood at six per cent as of March 2024. This move is intended to stimulate economic growth and keep inflation within the target range of four to six per cent.
Despite these efforts, customer complaints against banks and other deposit-taking institutions have surged. The Bank of Jamaica reported a near 80 per cent increase in complaints in 2022 compared to 2021, with issues related to electronic banking channels topping the list.
The Government has not been silent on these issues. Prime Minister Andrew Holness has urged the banking sector to consider the social context when contemplating fee increases, emphasising the need to protect vulnerable citizens. Meanwhile, the Opposition has proposed strategies to drive rate cuts, including opening up Government deposits to all banks using a competitive system.
As Jamaica’s financial landscape continues to evolve, the challenge for banks, regulators, and policymakers alike will be to balance the drive for digital efficiency with the needs of all customers, ensuring that no one is left behind in this digital banking revolution.
