Bank Zero has announced its account pricing as it edges closer to launch.
The mutual bank is currently up and running in a closed beta for a small group of customers. As widely telegraphed (it’s in the name!), the bank will have no monthly account fee. However, to ensure customers actually use their ‘check’ (sic) accounts so that they do not become dormant, a fee of R5 a month is charged if there are no transactions in six months.
Bank Zero says “basic banking should be free and extras should be paid for – not the other way round”.
Typical free transactions, as at other banks, include payments to other Bank Zero customers, transfers as well as card swipes.
However, it says it is “the first bank in the country” to not charge for EFT payments and not charge for debit orders. Most accounts at other banks – which charge monthly account fees, some in the hundreds of rands – bundle a certain number of ‘free’ debit orders and EFT payments. Additionally, prepaid airtime, data and electricity purchases via the bank’s app are free.
It has cleverly positioned fees for withdrawing cash, send-money transactions (to people who are not Bank Zero customers), as well as balance enquiries at point-of-sale or other bank ATMs as “third party costs which are passed on to you”.
|Monthly account fee||Free|
|Transfer between accounts||Free|
|Pay by card||Free|
|Prepaid airtime, data, electricity||Free|
|Withdraw cash at ATM||R9 per R1 000|
|Withdraw cash at POS (PnP, Boxer, Checkers, Shoprite)||R2|
|SendMoney (to self or non-Bank Zero customer)||R8.50|
|Proof of payment via SMS (e-mail is free)||R1.50|
A so-called ‘nuisance fee’ of R2 is charged when a transaction is declined for insufficient funds, or exceeding card limits, for three incorrect PINs, or if a new card is used before activating it (or old deactivated card is used).
Card personalisation and delivery to a Clicks store will cost R79, while the same service delivered to your door will be R139 in major centres (R179 for outlying ones).
Disputing a card transaction (chargeback) will cost R30, while disputing or stopping a debit order will be R8.
Customers can also receive money via a unique QR code.
This effectively turns the app into a merchant card terminal (a number of other banks have enabled this recently).
Here, the fee is 0.5% of the amount received. For example, a R1 000 payment will attract a fee of R5.
It says this “brings relief in the micro-payments space for specifically businesses, which now have an answer to the high rates typically paid when accepting online card payments – just add your unique QR code to that invoice or on your online checkout screen or in your physical store”.
Importantly, both the receiver and person paying must be Bank Zero customers. It is clear it plans to use this as a linchpin to grow its base.
Statements, which the bank says will run from the first to the last day of the month (not an arbitrary period) are e-mailed to you and are downloadable from the app for free for three months. Thereafter, these cost R10 each.
Opening an additional ‘check’ account on (either) your (personal or business) profile costs R100, but the account itself has no monthly admin charges. Additional savings or notice accounts can be opened for free.
The new bank enters a fiercely competitive market, where obvious comparisons will be drawn to TymeBank and African Bank which also charge no monthly account fee, as well as ultra-low-cost options from Capitec, Absa, FNB, Nedbank, Standard Bank and Old Mutual.
In the past few years, there has been significant downward pressure on pricing, with a bifurcation in the market with lower-priced accounts trending towards free and ‘private banking’ (and faux private banking) account fee ratcheting significantly higher.
The bank says: “Although there have been some shifts in the industry towards bringing down the costs for individuals, the focus has only been on entry-level accounts, with customers then forced to pay more should they want to upgrade to better functionality. With Bank Zero the same advanced payment functionality and real-time control are available to all customers.”
Bank Zero maintains that “businesses still pay far too high basic banking fees”.
Its basic, one-page pricing structure applies to both individuals and businesses. Currently, it supports private companies (Pty) Ltds, close corporations and sole proprietors. Trusts and partnerships will be included in time.
The most interesting (and important!) comparisons are yet to be made with rival business bank account offerings.