First National Bank (FNB) is reducing its retail banking fees as South Africa’s banking-fee price war gathers pace. In particular, it is cutting monthly fees on a number of its accounts, and simplifying charging structures. Douglas Blakey writes

FNB is not just cutting its fees across a range of its retail banking products, it is making its eWallet eXtra a fully fledged bank account called Easy Zero with no monthly fees.

FNB Retail CEO Raj Makanjee says: “The positive changes are part of our annual pricing and rewards review for 2019/2020. The changes reflect an integrated approach to helping customers with money management in line with their individual and family needs.

“We are also encouraging a savings culture by offering qualifying customers a free savings account. And we are offering family banking through our Spousal accounts, plus a free youth account with zero fees for e-transactions.”

From 1 July, FNB reduces fees for Easy Pay-As-You-Use (ZAR5.75 ($0.39) to ZAR4.95). The Easy Account Smart Option is also cut (ZAR65 to ZAR59) and Gold Fusion (ZAR155 to ZAR109).

Free benefits for Premier, Private Clients and Private Wealth cheque account holders have been increased substantially; fees remain unchanged on each account. Private Client and Private Wealth customers will also get a free Global Account with one Signature Card.

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In addition, they receive a Money Maximiser, as well as Local and Global Trader accounts. The monthly fee on the Premier Spousal account is reduced (ZAR185 to ZAR149). At the same time, a free FNBy youth account is available to all FNB customers.

Fees cut, airtime added

In addition, FNB customers will now receive free data, airtime, voice minutes and SMSes if they use FNB Connect. Customers with an Easy Account (Smart Option) receive 30 voice minutes, 80MB of data and 30 SMSes each month.

Gold and Gold Fusion account holders obtain 60 voice minutes, 120MB of data and 60 SMSes monthly on FNB Connect. FNB says the FNB Connect benefits for Easy and Gold account holders equate to the respective monthly fees.

Premier, Private Clients and Private Wealth account holders each get 60 voice minutes, 500MB of data and 60 SMSes on FNB Connect. Easy Account customers earn ZAR50 in FNB Connect airtime by spending ZAR1 or more on Easy Accounts at retailers Usave, Checkers or Shoprite.

Christoph Nieuwoudt, CEO at FNB Consumer, explains: “We believe our bank accounts and rewards offer customers the best value in the market. More importantly, customers can be assured that we will provide them with the best bank account for their needs.”

FNB eBucks

FNB’s eBucks Rewards programme has been a major behavioural driver over the last 19 years. It has paid out more than ZAR12.3bn worth of eBucks to members. In addition, FNB reduces fees for ATM withdrawals.

Customers with bundled pricing are afforded free cash withdrawals, capped in accordance with average cash needs of each bank account.

“We pride ourselves on putting customers at the centre of our banking solutions. The changes we’ve implemented demonstrate our firm commitment to value-based banking. The changes we’re making will go a long way to building main-bank relationships with our customers,” concludes Makanjee.

Challengers gain ground

Retail banking fees in South Africa are high in comparison with fees in most Western markets.

Incumbent banks’ traditional fees structures are also being targeted by new entrants and challenger banks; for example, TymeBank launched its EveryDay account in February, a monthly fee-free account. TymeBank styles itself as South Africa’s “first fully digital bank”.

It is also the country’s first majority black-owned retail bank, owned by African Rainbow Capital. It soft launched as recently as last November. Customers can open accounts in under five minutes at over 500 kiosks in Pick n Pay and Boxer stores around the country.

Alternatively, they can open a reduced-feature account on TymeBank’s website, and upgrade to a fully featured account when they get to a kiosk in store. The kiosks verify customers’ identities using biometrics and a range of other data, and issue personalised Visa debit cards with no need for any supporting documents. Tyme is on track to hit 500,000 customers by the end of July, and by the end of the year it has ambitions to grow customer numbers to 1 million.

Tyme says it has a potential market to target of around 20 million, as well as around 2 million SMEs. Meantime, African Bank is promoting its MyWorld account. Again, this account attracts no monthly management fee. Among FNB’s traditional rivals, Standard Bank MoMo account and Nedbank’s MobiMoney account are competitively priced.

The Standard Bank MoMo account launched on 22 May, priced at ZAR4.95 per month and includes data and airtime offerings and other benefits such as virtual and gold physical cards.