Dear Editor,
Several months ago, I wrote an article about the local banks ripping off cardholders on this island.
The world, including St. Martin, is rapidly doing away with cash transaction and going over to electronic transaction.
So, I have decided to bring up this topic again, in hope that as elections are less than a year away, somebody who is desirous of being elected, or re-elected, (including the minister of finance) will eventually do something about it.
Cardholders with US dollars bank accounts are at the mercies of some of the banks on this island.
When WIB Bank cardholders use their US dollars WIB card at an establishment that uses a machine from RBC Bank, FCIB or Republic Bank, (formerly BNS), the transaction is processed in US dollars and converted to NAf and subsequently re-converted back to US dollars, which causes the cardholder to pay a higher amount than what the transaction was approved for.
And in some cases, the transaction is processed in NAf and converted to US dollars because the cardholder has a US dollars account.
For example; a cardholder with a US dollars card goes to an establishment and processes a transaction for US $100, swipes the card and gets an authorization for US $100. The transaction is converted to NAf at 1.82 (a rate that includes the 1% license fee, which is applicable only when withdrawing US dollars cash or sending funds abroad) thus NAf. 182. As the cardholder maintains a US dollars account the transaction is re-converted to US dollars using the rate 1.78 and the cardholder’s account is charged US $102.25 while an authorization was obtained for US $100. The transaction was approved/authorized for US $100. The cardholder’s bank charges the cardholder’s account US $102.25 which is illegal because the transaction was approved/authorized for US $100.
The next example pertains to a situation where the transaction is processed in guilders. If the cardholder’s bill amounts to US $100 the establishment converts this amount to guilders using the rate of 1.80 The cardholder’s card is swiped and approved for the guilder amount NAf. 180 As the cardholder maintains a US dollars account the transaction is converted to US dollars at 1.78 and the cardholder is charged US $101.12.
Let me be clear, the merchants are not the ones doing the conversions. This is done via the bank’s system. In the first case, the bank used the rate of 1.82 which includes the 1% license fee, to convert the US dollars to NAf. The bank cannot remit the collected funds to the government because the reason for charging the 1% is not valid. So, the bank keeps those funds, which is illegal.
The conversions do not occur when a WIB cardholder uses the card at a WIB merchant. So, my question is, why does it occur when the WIB card is used at another bank’s merchant?
In the near future we will be compelled to use the banking system for all transactions, so I am pleading with the Minister of Finance to please look into this illegal practice now. This illegal rip-off system must be stopped.
Fernando Clark
