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21st August 2012
Barclays P2P service fee-free for international
Barclays has announced the expansion of Pingit, its P2P service for international transactions. It plans to offer transactions to destinations in Africa first, and expand to other parts of Europe in 2013. It is to start this week by opening the service to customers and recipients in Kenya. Later this year it intends to offer the system in South Africa. The bank holds a controlling interest in Absa Bank in South Africa, a major retail bank.
It remains the case that the sender can be a Barclays customers or a non-Barclays customer that has registered for the service. The sender only needs the recipients mobile number to send the money. The recipient will need to register in order to collect the money. One of the most interesting aspects of the announcement is that international payments will remain fee free for personal customers although the bank is making a FX margin which it suggests will average 3%. This will favour the small international payment where high flat charges are common although FX margins may are usually less. Pingit is open to business use although fees can be charged to business account holders in addition.
The European Commission has commented and negotiated over fees when it comes to Sepa payments however has not suggested controls over FX margins which are much harder to legislate. This is one of the forces driving a model of higher FX margins and no fees in various international payment methods.