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Tuesday 24.04.2018 | Name days: Nameda, Visvaldis, Ritvaldis
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Tverijons: Competition Council’s decision to fine banks is absurd

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Teodors Tverijons

The Competition Council’s (CC) decision, which accuses the entire Latvian banking industry of concluding illegal agreement, introducing and maintaining interbank commission fees for payment card system’s maintenance, is absurd and ungrounded, indicates the Association of Latvian Commercial Banks.

Moreover, the Competition Council is unable to clearly define who is the victim in the case, because the mentioned commission fee affects neither consumers, nor traders.

The Association believes the voiced reproaches are based on ungrounded allegations, ignoring the actual interbank settlement system’s contribution to the Latvian economic development, enabling consumers using specific bank’s payment card to pay without any additional charges for goods and services in a store where payment cards are provided by an another bank. The existing settlement system is transparent and ensures equal competitive opportunities for all banks, as well as allows consumers to settle payments on equal terms with any bank’s credit card at any store.

It is important that these settlements solely concern the interbank relations, and in no way directly affect customers’ expenses when using a bank card. In addition, multi-lateral agreements in Latvia have already been replaced with bilateral ones – another internationally accepted form of cooperation.

Allegations regarding the negative impact of the unified interbank commission fee on the Latvian economy are ridiculous, because this arrangement has helped create convenient and beneficial payment system in Latvia. Nor is it correct to criticize a supposedly secret agreement between banks, because all the information on the interbank payment card service system is freely available. The interbank commission fee does not affect consumers – these are technical settlements in the banks’ internal service system, from which all the proceeds are invested in the common settlement system’s maintenance, clarifies the Association of Latvian Commercial Banks president Teodors Tverijons. If such a system, as it exists throughout the world, was not ensured, payment card settlements would now be more complicated and costlier, Tverijons points out.

Several leading world organizations such as VISA, MasterCard, etc also practice such a system. Few years ago, Latvian banks adopted this international system’s operation principles to develop the domestic payment market. Also the European Commission has clearly admitted agreements on such interbank commission fees are lawful.

Tverijons explains at a time when the treats of cash flow are increasing in Latvia, fostering the shadow economy, it is very short-sighted to seek to destroy the existing non-cash settlement system, risking higher expenses for final consumers and fostering cash settlements. It is a well-known fact that cash servicing is two times costlier for the economy than non-cash payment settlements.

At the moment, the Members of the Association of Latvian Commercial Banks are examining in detail the Competition Council’s decision, and are assessing all available legal protection means to ensure a fair outcome.


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  1. Lucas says:

    Latvians have to move from these banks and take the money to and internet bank They will save a lot I take for example I got aVISA CARD PREMIER free of charge.

    Thumb up 0 Thumb down 0

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