Banking fees under the spotlight as the app-based Bank Zero 'fully' opens for business
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APP-BASED bank Bank Zero, one of the new, smaller bank start-ups in South Africa, has released its new pricing for 2022 with all fees remaining exactly as they were in 2021 and 2020 in line with the bank’s stated aim to bring much-needed relief to both consumers and businesses.
Chairman of the bank Michael Jordaan also said this week that after a constrained opening, Bank Zero was now fully open for business to all customers, and the Bank Zero App was also freely available from yesterday in the App Store and in the Google Play Store.
Public access to the bank was initially limited to waitlisted individuals while the effectiveness of the digital customer support processes created during the pandemic to match a new WFH (working from home) world, was monitored.
The bank offers zero monthly fees, zero fees for debit orders and EFTs and card transactions, and zero fees when buying prepaid items such as data or electricity.
South Africa’s banks have a wide, competitive array of pricing, many specific to bank products and accounts, which makes comparisons difficult.
The much bigger older banks such as Standard Bank, Absa, FNB and Nedbank all vie competitively around monthly account fees, and their fees are around R100 per month for customers, with FNB’s the lowest of these banks at R89. Like Bank Zero, digital bank Tyme Bank also charges zero monthly account fees.
And while Bank Zero charges zero fees for many of its banking products, an ATM cash withdrawal costs R9 per R1000, but it falls to R2 if the cash withdrawal is at a Shoprite, Boxer, Pick n Pay or Checkers.
This year Standard Bank came out the cheapest of the big banks with a R7.50 charge per R1 000 withdrawn at ATMs, a rate that applies to all its accounts, including premium banking. Tymebank’s ATM withdrawal charge is also R9 per R1000.
On debit orders, you can expect to pay R3.50 per debit order at Standard Bank for its cheapest account per R500, R5 at Bidvest Bank on the same basis, while an external debit order on Nedbank’s PayU account costs R5.50.
Nevertheless, Jordaan said yesterday the fact that advanced app-based banking was now available to 24 million South African smartphone users and their businesses, meant massive relief in bank fee payments, potentially in the billions of rands, as well as good features and full access. “Our youngest customer is three while our oldest is 80. That's just incredible,” he said.
A key feature of Bank Zero’s app was that the zero fees and innovative functionality were the same for consumers and businesses. Tyme Bank also offers many free bank services to businesses, and a cash deposit at a Pick n Pay or Boxer store will cost R6, while a cash withdrawal at these stores costs R3. Bigger banks traditionally charge higher fees for business banking transactions than for individual customers.
“Our launch is no longer constrained, and we invite all businesses and consumers to experience powerful banking at zero fees.” Bank Zero was the first bank in the world to be launched by a fully WFH team, said Jordaan.
Yatin Narsai, Bank Zero CEO, said another new feature from yesterday onwards was the the adding of relationships (like friends, business associates and authorisers) where they could immediately download the App, register and be part of that specific community – be it a business, sport club, project or a savings club.
“This brings digital financial connectedness to all,” he said.
Currently Bank Zero caters for businesses that are a (Pty) Ltd, CC or a sole proprietor. The on-boarding of trusts and partnerships will be enabled later.
Narsai said the bank saw opportunity in this space, with the South African SME market alone estimated at 5.6 million businesses.
Bank Zerio said since its public debut, it had experienced “excellent take-up and growth in card transactions.” Most popular was ecommerce – with card subscriptions growing rapidly.