Absa has become the first financial services firm to
offer Western Union’s remittances service on all three distribution
channels: branch, mobile and internet. While South Africa’s Reserve
Bank has placed restrictions, Absa believes it will boost its
already successful multi-channel strategy. Douglas Blakey
reports.
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South Africa’s largest retail bank, Absa, has extended its
existing relationship with global remittances service provider,
Western Union (WU), to offer the WU Transfer Service cross-border
on all three distribution channels – branch, mobile and
internet.
According to Absa, it is the first
financial services firm in the world to offer the service across
all three channels, though the online and m-banking offering is
only available to Absa customers and has launched subject to strict
guidelines imposed by the South African Reserve Bank.
Initially, the service enables
transactions up to a maximum of ZAR30,000 ($4,017), or the sender’s
existing online or m-banking transfer limit – whichever is the
lower, while an annual transaction limit for individuals of ZAR500,
000 applies.
The Absa WU Transfer Service allows
money to be sent such as: earnings of foreign nationals temporarily
resident in South Africa; gifts other than to charitable,
religious, cultural or educational organisations; and maintenance
or aliment payments in respect of a court order.
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By GlobalDataExamples of when money may be
received include: foreign tourists visiting South African receiving
funds from abroad related to their visit; foreign students studying
in South Africa receiving funds from abroad to pay for their living
expenses, tuition and books; earnings of South African residents
temporarily residing abroad; and monetary gifts received from
abroad.
“Our approach to financial services
is driven by innovation,” said Alfie Naidoo, Absa Group COO.
“Banking has moved well beyond
single function savings and lending. Financial institutions have
become lifestyle partners to consumers, and to this end Absa will
continue its leadership role.”
Absa’s enthusiasm for the mobile
banking channel has paid off with spectacular results, becoming the
first South African bank to sign up onem m-banking customers in
2009. By the end of the year, the number had reached 1.5m, up 113%
year-on-year and equivalent to 14% of Absa’s 10.8m retail banking
customers; the m-banking customer numbers far exceeded Absa’s
internet banking customer base of 1.2m (up 11% during 2009).
Absa’s multi-channel strategy also
includes the highly successful CashSend service. Launched in 2009,
CashSend was one of the most successful retail launches of the
year, allowing Absa customers to transfer cash from their own
cheque or savings accounts to anyone in the country, with
recipients able to withdraw cash at ATMs without needing a bank
card or account.
Investment in the bank’s digital
channels has, however, coincided with a reduction in the Absa
branch network, down from 1,011 in 2008 to 929 outlets at the end
of 2009.
Major remittances markets for Absa
include Zimbabwe and Zambia in Africa; the US and Canada in north
America and the UK, France and Germany in Europe.
In the first three months of fiscal
2010, Absa’s profits before tax increased by 114% to £167m
($238.8m) from £78m in the year ago quarter, including a one-off
credit relating to the group’s recognition of a pension fund
surplus and the appreciation in the average value of the Rand
against Sterling.
Excluding these items, profit before tax increased 15%, driven
by lower retail impairment.
