Payment services in 2022: great differences remain in the range and pricing of banking services

Working with banks and savings banks, Banka Slovenije has put together a basket of payment services to reflect the payment habits of the typical customer. In our regular analysis that we conduct each year, we found that the average cost of the basket of services was EUR 70.71 in 2022, a rise of EUR 1.31 on 2021. The range between the cheapest and the most expensive basket remains very wide.

In the comparison of advertised effective interest rates (EIRs) across individual banks and savings banks, we also find the differences between the banks’ offers to be relatively large. The gap between the highest and lowest EIRs on the average consumer loan is just over 3 percentage points, while the gap on the average housing loan is just over 0.4 percentage points.

To ensure the straightforward comparability of the services offered by banks and savings banks, the calculations for each bank 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 therefore provides an overview of the full package of services offered by all banks and savings banks on its website. The price comparison of the baskets of consumer payment services serves as an informative aid to choosing the most suitable banking package.

Table 1: Basket of payment services of the typical customer

Cost of basket of services: EUR 29 to EUR 97

The average annual cost of the basket of services for the typical customer for the packages aimed at the majority of customers amounted to EUR 70.71 for the year (2021: EUR 69.40; 2020: EUR 70.47), and was almost 136% higher than at the cheapest bank.

Table 2: Calculation of cost of baskets of payment services of the typical customer as at 31 December 2022

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.
Source: Own calculations based on basket of services (Table 1), and corresponding fees applicable on 31 December 2022

Ranges in EIRs of 3.18 percentage points and 0.42 percentage points according to online calculators

With the aim of providing an even more comprehensive look at the range of banking services for consumers, we have also 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 2022. 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, with the borrower assumed to be a customer of the bank or savings bank in question. Real estate was assumed to be the collateral for the housing loan.

The average EIR calculated in this way for a consumer loan was 7.90% (last year: 7.25%), with a range from 6.29% at the cheapest bank to 9.47% at the most expensive, which is equivalent to slightly less than EUR 1,000 in financing costs (last year: just over EUR 600). The average EIR for a housing loan according to the online calculators was 4.45% (last year: 2.23%), with a range from 4.16% at the cheapest bank to 4.58% at the most expensive, which is equivalent to around EUR 3,000 in financing costs (last year: around EUR 3,500).

Table 3: Advertised EIRs for consumer and housing loans as at 1 February 2023

* The bank or savings bank does not have an online calculator.
** Consumer loan for new customer in permanent employment; no calculator for housing loans.
*** For housing loans the customer must take out permanent or term life insurance.
**** Consumer loan secured by mortgage.
**** Calculator for housing loans with variable interest rate only.
Sources: Websites of banks and savings banks