Bank of Kigali (BK ) has embarked on a $500,000 project that will enable it to issue Automatic Teller Machine (ATM) VISA cards , a service that is expected to minimize queues in the bank’s branches.
The process will also reduce current delays in issuance of ATM cards from between 3- 6 months to one day.
This move follows BK’s recent acquisition of rights from VISA Internationa, a company in charge of the ATM cards.
In an interview with Business Times on Thursday, Lawson Naibo, the Chief of Operations Officer (COO) of BK noted that as principle members of VISA International , BK will start issuing ATM VISA cards to its customers early next year.
Currently,SIMTEl, the national switch for inter-bank ATM services that operates 27 ATMs has been in charge of such transactions.
“The card business has not grown despite having a strategic investor, and if every body was truthful –no bank is making profit on the card business. One of the challenges we have had is the time it takes for you to get the card,” Naibo said.
The COO also mentioned that the bank targets to increase the number of ATMs cards in circulation by issuing ATM cards and cheque book on the same day of opening the account.
Currently only 3,527 individuals out of approximately 50,000 customers of BK have access to ATM cards.
The official also said that the new service is likely to increase the cost of an ATM card to between Rwf3000-Rwf5000 from the current Rwf1,500.
The ATM cards will be used both locally and internationally depending on the customer needs.
“We are trying to resolve all the issues that have been affecting the card business. We are targeting having a million cards in circulation.”
According to Naibo, having more ATM cards in circulation makes economic sense for the bank to be able to meet VISA International charges.
BK will have to part with a quarterly fee of $30,000 in addition to $70,000 joining fees.
“Now with the card population that we have got, there is no way we are going to recover even the quarterly subscriptions,” Naibo said.
The bank is planning to install ATM machines in all its 18 branches across the districts and provinces.
The other principle member of VISA International in Rwanda is Ecobank. Access Bank and Kenya Commercial Bank will use their parent companies to issue the VISA ATM cards.
The other banks on the market will have to negotiate with the two principle banks to be able to extend VISA services to their customers.