Equity Group to Earn Billions from Debit Card Fee
Equity Group is set to earn billions of shillings from the introduction of an annual debit card fee of Sh240.
The amount is being charged on millions of active customers in Kenya.
The bank has started collecting fees from a section of its clients.
Equity Group Earnings
This will see it earn upwards of Sh2 billion per year, assuming most of the issued cards are active.
“We wish to advise that this is an annual charge that was recently introduced as per our tariff guide,” Equity Bank Kenya said.
“In this regard, Sh240 shall be deducted from your account only once per year, for the period the card remains active.”
The Equity fee is applied 12 months after the card is issued and continues until the card expires.
It was not immediately clear whether Equity has introduced a similar charge in its other banking subsidiaries in the region.
Most other banks do not charge an annual debit card fee.
Banks Operating Fees
Banks have, however, been expanding their list of fees.
This has partly been attributed to the need to cover the operating costs of providing specific services.
The new charge is set to boost Equity’s non-interest income by roping in millions of retail clients who previously only paid a one-time fee when acquiring or renewing their debit cards.
It also provides stable and recurring revenue as most clients hold debit cards for withdrawing cash at ATMs and making payments at the point of sale terminals.
Equity’s non-interest income stood at Sh31.9 billion in the nine months ended September, representing 39.6 percent of the total operating income of Sh80.4 billion.
The introduction of debit card fees adds to the bank’s income from credit cards.
Credit cards have, however, fewer takers as they target middle to upper-income clients with significant disposable incomes.