Payment services in 2021: major differences in the range of services and price of packages
Working with banks and savings banks, Banka Slovenije has put together a basket of services to reflect the payment habits of the typical customer. Our special analysis shows that the basket of services cost an average of EUR 69.40 last year, slightly less than in the previous year. The range between the cheapest and most expensive banks remains very wide.
For a more comprehensive look at the range of banking services for consumers, we also drew up a comparison of the advertised effective interest rates (EIRs) across individual banks and savings banks. Here we find that the EIR on the average consumer loan is more than three times higher than the advertised EIR on the average housing loan. Like the basket of services, in this area too there are major differences from bank to bank.
To ensure the straightforward comparability of the services offered by banks and savings banks, the calculations are based on the same basket of payment services. The content of the basket was put together in conjunction with banks and savings banks and reflects the payment habits of the typical customer. Individual packages might include a wider range of services, but these could not be taken into account in the straightforward comparison provided by the basket of services, and the same goes for any qualitative differences in service (e.g. a wide ATM network).
Banka Slovenije thus provides an overview of the full package of services offered by all banks and savings banks on its website. The consumer price comparison of the baskets of payment services serves as an informative aid to choosing the most suitable banking package. Here we should point out that a change in the ownership of a bank or savings bank can affect its services and prices.
Table 1: Basket of payment services of the typical customer
Cost of basket of services: EUR 28 to EUR 97 per year
The average annual cost of the basket of services for the typical customer amounted to EUR 69.40 for the year (2020: EUR 70.47), and was almost 150% higher than at the cheapest bank. The range between the cheapest and most expensive banks was very wide: it stretched from EUR 28.08 to EUR 97.68 at the end of the year.
Table 2: Calculation of cost of baskets of payment services of the typical customer as at 31 December 2021
Note: The comparison also includes packages that are available solely to new customers or are only available to existing customers with a switching fee, and packages that can only be opened online. A change in the ownership of a bank or savings bank can affect its services and prices.
* Change in composition of package as of 10 January 2022.
** Package no longer available to new customers as of 11 January 2022.
Ranges in EIRs of 2.55 percentage points and 0.49 percentage points according to online calculators
With the aim of providing a more comprehensive look at the range of banking services for consumers, we have drawn up a comparison of financing costs for retail customers. The comparison uses EIR as the most complete indicator of financing costs, as it includes the interest on the borrowed money and the cost of credit services.
The figures were obtained from the online calculators of the individual banks and savings banks, where we used an average maturity and an average loan amount for 2021. For consumer loans the average maturity is five years and the average loan amount is EUR 12,000, while for housing loans the average maturity is 16 years and the average loan amount is EUR 80,000. A fixed interest rate was chosen for both types of loan, where the borrower is a single parent with two children (where this choice was possible), and an assumption that the borrower is a customer of the bank or savings bank.
The average EIR calculated for a consumer loan was 7.25%, with a range from 5.88% at the cheapest bank to 8.43% at the most expensive. The average EIR for a housing loan according to the online calculators was 2.23%, with a range from 2.06% at the cheapest bank to 2.55% at the most expensive.
Table 3: Advertised effective interest rates (EIRs) for consumer loans and housing loans according to online calculators as at 21 February 2022
Note: Advertised prices, which may differ from actual transaction prices. A change in the ownership of a bank or savings bank can affect its services and prices.
* Does not have an online calculator.
** Does not have a calculator for housing loans.
*** Unsecured; EIR does not include cost of current account.
**** Calculator for housing loans with variable interest rate only.
***** Calculator only for housing loans of up to 120 months.
Sources: Websites of banks and savings banks, 21 February 2022