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As Discovery Bank looms, FNB launches ‘Fusion’ credit/cheque account

Why do we have two different cards to begin with?

FNB has launched a single account for its Premier, Private Clients and Private Wealth customers which offers what you’d expect from a traditional cheque account, overdraft facility and credit card. The offering, called ‘FNB Fusion’ will be available from June via a free and seamless electronic ‘upgrade’ from existing accounts.

Of course, this is happening as Discovery prepares to launch its banking offering in 2018 (a date has not yet been released by the financial services group, but is likely in the first-half). To date, the only bank with a similar product targeting this high-end segment is Investec: its Private Bank account is effectively a credit card with current account functionality. Capitec, with its credit card offering on top of its standard Global One account, offers the same type of solution, but targets a far broader market.

Yashen Singh, CEO of FNB Premium and Business Core Banking, says these competitor offerings were “definitely a factor that was considered” when creating the Fusion product. “A single account certainly resonates” with some customers, he adds, in reference to Investec’s product.

The appeal of an account like Fusion is obvious: customers get a single credit limit spanning both the credit card and overdraft facility, underpinned by a fully functional transactional account. Pricing for the Fusion Premier account is R199 per month, the same as the current Premier Cheque and Credit Card bundled option (to prevent arbitrage). If a balance of R50 000 is maintained in the account, the monthly fee is waived. The bundled option and separate accounts remain in place. (Private Clients and Private Wealth Fusion accounts are priced at the same level as their bundled options.)

For those over 60, the bank has the FNB Fusion Premier Select account at R85 per month, with a waiver of fees if you have R10 000 in either the Fusion account or in any of FNB’s savings and investment accounts.

Credit on the Fusion account works as follows: instead of 55 days interest free on a credit card and overdraft interest payable from day one (with two separate limits), all credit is interest-free for up to 30 days (effectively a midpoint between those two traditional limits). All other transaction fees are aligned with the existing Premier account charges. From a customer perspective, a single card means you only need to remember one PIN, and from the bank’s perspective, getting rid of one piece of plastic means it is able to reduce the risk of fraud somewhat.

When it comes to eBucks rewards, the card is treated as a credit card, also meaning the higher interchange fee payable by merchants (which drives the entire behaviour change programme to begin with!). In the Premier segment, eBucks reward rates when swiping a cheque card for in-store purchases are a flat 0.25%, regardless of reward level. With a Fusion (or credit card), those range from 0.5% on level one to 2% on level five. Similar differences exist when it comes to online shopping (at roughly double the in-store rates; a flat 0.5% versus 1% to 4%). Reward rates are higher on both Private Clients and Private Wealth. A handful of eBucks Rewards earn rule changes (from 1 July 2017) will be announced later this week.

Ryan Prozesky, CEO of FNB Value Banking Solutions, says that in research the bank has found customers to have two different mindsets when it comes to managing money. Some prefer the mental separation and understand that one card represents their money, the other (credit) card is the bank’s money. Another segment prefers to “put it all in one place with all their spending grouped together”. The bank says the appetite for this kind of account is particularly biased towards younger customers.

Singh says that while the bank only offers this in the high-end segments (Premier, neé ‘Platinum’, Private Clients and Private Wealth) for now, it’s certainly thinking about how it would position this for mass market (Gold) customers.

This is not necessarily an account that will suit everyone. But it will be interesting to see how aggressively FNB pushes this Fusion offering once the dust settles in 2018.

  • Hilton Tarrant works at immedia. He can still be contacted at hilton@moneyweb.co.za.
  • He owns shares in FirstRand, first purchased in July 2011.

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COMMENTS   28

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FNB no longer innovators-behind the curve.Bring something new .

1. Dont play with credit
2. With advances in technology, prestige banking is just not necessary and it is a rip-off

(Charges on FNB Premier are not worth it, am on it)

GE Investments or Electio Alternative Investments – Does anybody have anything to comment about this company with regards to Investing.

Not the place for this discussion. but a simple check shows them to be brokerages based in Dubai.

Short answer: can’t tell if they are legitimate but the is no reason to use them anyway

If you’re based in SA then zero reason to use foreign brokerages as costs are lower here given our weaker currency and local excahnges give you global market access (most local exchanges use teh white-labeled Saxo platform).

The risk of using foreign brokerages is also high – you can only consider online reviews (less trustworthy) and any issues you have no limited local recourse within SA law ..i.e. once you fund your foreign account from SA to a purely foreing entity then then your ability to reclaim money (if anything goes wrong) is limited).

Hi Reuel, I see you’re keen on investing? How does a fixed rate north of 15.5% sound to you? Sounds too good to be true? It IS true! Send me a reply and I can show you how..!

Why must I leave R10000 lying in that account when I can get a higher return somewhere else??
This preferential treatment is a load of hogwash. I was offered private banking by FNB and Investec, all sounded good until I was asked how much do I want to borrow? I said nothing I have cash in the bank. They said no borrowing in millions then no Private banking.
My money is the same color as anyone else, my track record alone should qualify me for private banking.
Sorry not interested my accounts work just the same as the others. Give this new setup a year and you will see revamped charges.

Hi pwgg, would you like your money to really work for you?? How does a fixed rate north of 15.5% sound to you? Sounds too good to be true? It IS true! Send me a reply and I can show you how..!

If you have a home loan or creditcard/overdraft then the most important question is cost of financing i.e. what interest do they charge. (*hint if you qualify for private banking then the best rates are at Investec & RMB [RMB is not FNB!])

If you don’t have the above debt then yes eBucks is the best rewards plan get a GOLD account.

eBucks/slow lounge or any other “benefit” is not a reason to use FNB privaet banking. Yes eBucks is much better than teh Investec dividends (rewards) pan, but you more than make up for this with the cheaper interest payments.

These bankers still don’t get what I want.

1. 24/7 service
2. Less fees
3. I don’t want to go to the branch; unless forced,
4. Convenience of Personal Banker to handle issues that prevent me from going to a branch,
5. Friendly online system
6. Ability to move funds from one account to another.
7. Overdraft readily available to a limit,
8. No spam; unless specified.

Do this and I’m like a king.

At a balance of R50 000 invested at 7% p.a. (ie fixed deposit or money market) = R 291 / month.
The monthly bundled account fee is R199.
Why bother?

Horrible fee structure, but not sure about Capitec though (need to investigate). I just looked at my statement and the charges that went off today. Terrible.

the 50 000 minimum cash balance receives interest and can be a semi fixed term rate. Cash receives 7.04% per month with a general 0.7% total fee, net=6.4%pm interest. Not sure what the intr rates are at different banks, but you get that and the monthly fee deduction. The question really is why such a large amount unless the account is designed for those with loans or deep running overdraft debt? Or, is 50 000 the sort of money such an account holder might spend in a normal month?
What is the required balance held in ones accounts. Investec requires a minimum of 4mil in their wealth & investment account.

The ONLY reason they’re doing this for the higher interchange fees. They (and Capitec) did the same with cheque hybrid cards when the interchange fees were cut on debit cards!

Well done FNB proud of you. I have banked with 2 3 of the other big 5 banks and none of them come near you and your forward thinking.

I’m sure your manager at FNB will give you that promotion now.

‘Why do we have two different cards to begin with?’

Why not a single card for everything? Credit, cheque, ebucks, Smartshopper, Bsmart, ( Cape Buyaid) Discovery, BA loyalty ……….. thelist is endless.

Would it not e a fairly simple thing to do with a chip powerful enough if ALL suppliers bought into it. Could be done by a central supplier maybe for security of customer and individual supplier info.

Any real impediments to this?

Antiquated banking and rewards systems. I have about 6 different Discovery cards for their benefits (HealthyGear, HealthyFood, Discovery Insure, Woolworths, Dischem, Clicks) AND a Discovery credit card…

Hilton, can’t seem to find out anything about Fusion online. Is there a link somewhere?

Biggest problem of the BIG 4 banks is their branch staff, they are all poorly trained and do’nt give a **** about customer satisfaction

Haha! The ones who prefer to “put it all in one place” have obviously just not yet learned to make the distinction between their own money and the banks’. But they will — helped along by this product, perhaps.

I used to work at FNB. I think I regressed in terms of my IT skills while I was there. All the hype around innovation is only centered on their Marketing/Sales. Anything else is just a pile of ****

I used to work at FNB. I think my IT skills regressed in my time there. The hype around innovation is all credit to their aggressive Marketing/Sales. When I look at what I do now Vs what I was exposed to there, DAY and NIGHT, I kid you not.

“The appeal of an account like Fusion is obvious: customers get a single credit limit spanning both the credit card and overdraft facility, underpinned by a fully functional transactional account.”

With the state of the economy, we should be closing overdrafts and paying off credit cards. Unsecured ending is far too expensive.

Hilton, now FNB have been thinking ‘out of the box’ and have come up with something.

If having a minimum investment in an account which is accruing interest gets you a waiver of the fees that they would charge – a full waiver that is, then they will be launching a product that other banks will find hard to compete with, especially if it also attracts the EBucks benefits too.

I am keen to see what the final products looks like once launched. Any idea when the launch will be ?

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