JCC Payment Systems (JCC), the bank owned credit card clearing monopoly was charged CYP 373.374.49 by the Price Competition Commission for abusing its dominant position in the market and for overcharging its clients.
George Christofides, Chairman of the Competition Commission said that JCC, which had been under investigation for overcharging and reaping excessive profits to the benefit of its shareholders, the Banks, was fined CYP 373.374 (some 5% of its annual revenue), but more importantly, agreed to reduce charges.
Also under investigation by the committee are three banks, Laiki, Bank of Cyprus and Hellenic, that appear to be in breech of various contracts.
The committee found JCC guilty and in a written announcement noted that the company had violated competition regulations and had been penalized accordingly. JCC decided not to contest the charges or the levy and in a statement said it would undertake all necessary measures to ensure that violations are not repeated.
JCC, which was formed in 1987 by the Bank of Cyprus, after which Laiki joined as a shareholders and is now comprised of a consortium made up of all the major banks on the island including Hellenic Bank, National Bank of Greece and Arab Bank.
REDUCTION IN CHARGES
In an effort to lower the penalty, which could have reached 10% of annual revenue, JCC agreed to immediately lower charges and fees that it levies on its more than 10.500 merchants and commercial establishments that accept credit cards of whom 7000 are believed to be small merchants.
JCC has agreed to reduce charges by up to 15% that will be implemented gradually until March 2007, costing the firm some CYP 2.1 mln based on 2005 prices. Most of the reduction in fees refer to 95.2% of its users, the small merchants and establishments. JCC has also agreed to reduce by CYP 16 or 15% its annual charge that it levies on businesses, which means charges will drop from CYP 96 to CYP 80, plus VAT.
JCC has also agreed to refund some of the annual fee in the event that the establishment manages to generate increased volume. More importantly, JCC has also agreed to improve its clearance of funds from transaction day plus 3 working days until funds are credited to the merchant bank accounts (T+3) to two days or T+2.
