BREAKINGE NEWS: The Central Bank convened with the Commercial banks yesterday, in the presence of MinLab, representing MinFin, and agreed to extend the cap on ATMs withdrawals to $400 or $500, how much exactly is to be advised in the coming few days. Common sense prevailed, my compliments to all involved. This better decision makes my column for today obsolete, but I am posting it anyway, because I can!
This is what I wrote yesterday: The latest decision by the Central Bank to put a cap on ATM withdrawals constitutes collective punishment, which is always the easiest, and always the least effective. Let’s just ground everyone without addressing the issue, or fixing anything. CLA. So what do you suggest, Mr. Central Banker? For North American tourists to use their credit cards, right? Do you think that the beach bums operating the banana boat take credit cards? How can papa tourist explain to his kid that he has no cash in his pocket for a fun watersport ride, while on a family vacation? And mom wants to get a massage at an excellent spa that guess what, has no plastic facilities. All these small annoyances add up, and visitors are inconvenienced big time. So don’t brush it off, it is a major hassle. Aruba is not a totalitarian regime, nor is it a dictatorship, and you can’t tell anyone how much money they should carry around in their pocket and in which form; this is their money, and they should have unlimited access to it. That said, I understand that the Commercial Banks were against the cap imposition, but the Central Bank bullied the decision through with the promise to review in 6 months, which is light-years away. Our banks really don’t care about the rush on the ATMs because when they settle with the international credit cards companies they get their dollars back. Not exactly, they care about the long lines and the constant outflow of dollars that results in empty ATMs and bad service. BUT it’s the Central Bank which is applying the brakes, to prevent its dollar reserves from being depleted, because then the country won’t have enough currency to pay for the importation of goods and services, and it will affect our BP, our sacred balance of payments. Aruba is an easy target for the desperate Venezuelans, determined to survive, and the Central Bank decided to fight back on our behalf to restore law and order, which is a very positive development, but why by means of collective punishment involving our European and North American visitors??
OUR SUGGESTION: Can’t the ATMs recognize and differentiate between cards? The machine knows if you’re in Miami, Amsterdam, Berlin or Caracas. It’s no rocket science. They are using a bin number to prevent locals from withdrawing US dollars already; they could do the same with Venezuelan credit cards WITHOUT inconveniencing the masses. Think about it, if you limit the Venezuelan cards to $200 a day, they will stay THREE TIMES longer. And incidentally, if visitors get florins and convert those into dollars paying a 1.3% exchange tax, it means more than a quarter million dollars income for the Central Bank.
PIERRE RAFINI: The makers of the ATMs, NCR and Diebold, as well as the software companies in charge of connectivity Maestro & Cirrus, do not facilitate discrimination, and do not offer card recognition features, to exclude Venezuelan cards. The island would be better off just slowing these tourists down at the border, by imposing greater cash requirement, so they must come in with money. Additionally, limit the number of flights and air-seats, to reduce the number of visitors coming in.
Just to give you an idea:
* Traffic from Venezuela was up by 34.6% from 30,009 stopovers in October 2014 to 40,387 in October 2015.
* In the first ten months of 2015 traffic from Venezuela grew by 44.5% compared to the first ten months of 2014 from 187,467 stopovers to 270,889.
We’re talking at least 20 million dollars a month, in Venezuelan credit card charges.