Kiwibank joins fee cutters

Tuesday 25th August 2009

Kiwibank joins the movement to cut fees to customers, following similar moves made by Westpac and BNZ.

It will cut dishonour fees for failed automatic payments, direct debits and cheques from $30 to $7.50 for personal and business accounts from the beginning of October.

Unarranged overdraft fees will be reduced from $15 to $10 per month and honour fees will be removed entirely.

Acting chief executive Nick Astwick said the fees to be charged for failed payments will revert to the charges originally set by the bank when it was launched in 2002.

The reductions will reduce the bank’s revenue by about $18 million a year. Astwick said there had been significant changes in Britain and Australia in relation to penalty fees and it was inevitable that these changes would apply in New Zealand.

“We do believe a small fee should apply to cover bank costs and to encourage customers to ensure they meet contracted payment obligations to other parties and companies. However it has become clear that the level of the fees has been causing financial stress for customers on limited incomes and in line with market changes, we are reducing our charges.”

The bank will continue to work with customers to help them avoid the fees altogether. Kiwibank tries automatic payments twice before a failure fee applies and also offers customers the option to receive alerts after the first payment failure.

The bank already offers customers transaction fee free banking and a no fee credit card, along with a range of services such as txt and email alerts to help customers avoid fees and manage their accounts better.

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