Nationwide, the UK’s largest building society, has announced that it will begin as of November 1 to charge fees of £1 on ATM cash withdrawals in addition to a 2 per cent commission on all foreign transactions.
Prior to this policy change, Nationwide did not charge any fees or commission charges for any financial transactions within the borders of the European Union.
This customer perk used to be in effect for all manner of foreign financial transactions until Nationwide limited the scope to within Europe. The building society claimed that VISA was to blame, citing their 1 per cent charge the company levied on all financial transactions.
Nationwide’s current account was widely praised by several consumer groups up until this reversal of its no-fee policies, including a hearty recommendation by well-known financial expert organisation This is Money. Industry experts predict that this may be a nail in Nationwide’s coffin.
Nationwide plans to begin charging a 2 per cent commission charge on all global transactions starting 1 November of this year. Additionally any ATM withdrawals made by current account holders will be subject to a £1 service fee.
The new perk replacing Nationwide’s now scrapped no-fee promotion will be to reward its loyal members by providing free travel insurance to those consumers who use Nationwide’s FlexAccount as their main current account.
In order to qualify for the free travel insurance, Nationwide customers must make deposits of £750 at a minimum on a monthly basis, either as a direct deposit from their paycheck or from an account not originating at Nationwide.
Nationwide claims that, for a couple with a joint current account, its free travel insurance is worth up to £80, which is significantly more than what that same couple would save on the old promotions waiver of fees and commissions, which the building society estimated those savings at approximately £24.
Financial experts agree that the likelihood of a backlash on the part of angry Nationwide account holders is high; many customers viewed the lack of any fees on transactions in the EU as a major perk. The building society’s credit card will not be subject to Nationwide’s new policy change, but transactions against credit instantly charges interest on cash withdrawals, in addition to a fee.