Absa has announced that monthly account fees for its “core” offers, including Transact, Gold Value Bundle, Premium Banking and Private Banking, will not increase in 2021.
Absa is the last of the four full-service banks to announce pricing for the year. FNB froze its fees in July 2020, while Standard Bank and Nedbank both announced in December that theirs would remain the same from January. Capitec will announce price changes later this month. It cut its monthly fee in 2019, held it steady last year, and is widely expected not to change it for a further year.
Absa is selling its changes as a “comprehensive, new-look pricing structure” – and it takes effect from March 1, which is atypical. Generally, pricing changes occur at the start of its financial year in January. This suggests the bank waited longer than normal to make the decision, perhaps weighed by concerns over the impact of the second wave of the Covid-19 pandemic.
It has scrapped the monthly fee on its Student Silver cheque account (this currently costs R29 a month). This account is bundled with an unlimited suite of standard transactions (withdrawals/deposits, payments, swipes, debit orders and airtime purchases) on the bank’s electronic channels. Given the aggressive nature of this change, this segment is clearly a renewed focus for the bank. Market pressures from lower or zero cost alternatives such as Capitec and TymeBank as well as other banks which have cut fees for entry-level accounts will have chipped away at this base for some time.
Immediate payments fee
Separately, it has cut the fee for immediate payments made to other banks. This is currently R65 but will drop to as little as R10 (for amounts less than or equal to R1 000) from March. Immediate payments for amounts above this will cost R49, making these 33% cheaper.
Cash charges continue rising
The bank has increased the fees for withdrawing and depositing cash at its ATMs by 10%. These charges are R2.20 per R100 (or part thereof), whether drawn or deposited.
This makes its charges for larger withdrawals pricey, especially when compared to other banks.
Customers on its Gold Value Bundle or Premium Banking accounts have a set value of ‘free’ withdrawals and deposits per month (R4 500 and R6 500 respectively). Withdrawals at retailers’ point-of-sale are free across these two bundled accounts. The changes also see these costs fall away on the entry-level Transact account.
Strangely, the bank has added an option where Gold and Premium bundled customers can “upgrade” their package to “receive unlimited free Absa ATM cash withdrawals” for R75 a month.
It has halved its card replacement fee to R70 from March. However, the so-called “declined fee” where a transaction is unsuccessful will increase from R8.50 to R10. Dishonoured or returned payments currently cost R50 for the first three in a 12-month cycle, thereafter increasing to R150 each. This drops to R10 for the first four (thereafter, R150). Disputes of debit orders online or in its banking app will cost R5 within 40 days. This is currently free.
Monthly account fees increase slightly on both its mid- and upper-mid-market (Gold and Premium Banking) credit cards.
The bank says it provided “R9.8 billion in payment relief to customers, and more than R250 million in relief through a combination of fee reductions and interest rate subsidies last year”. Some of the latter would’ve come from waived Saswitch penalties for drawing cash at other bank’s ATMs during the peak of the pandemic.
It also notes that the “embedded retrenchment, disability and death cover” on its core offers “paid out a further R160 million to customers in 2020”.
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