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Banks’ cash-send fees, services compared

Mobile wallets are convenient but in the case of one bank, fairly pricey.
Mobile wallets have become popular channels for transactions such as paying domestic help, remittances, or sending money to friends. Picture: Supplied

While Absa pioneered a way to send money to any cell phone number with CashSend in 2008, four of the country’s five retail banks now offer similar services to clients. FNB and Standard Bank quickly caught up, with their eWallet and InstantMoney offerings launching in 2009 and 2010 respectively. Nedbank unveiled Send-iMali in 2014, while Capitec allows customers to send money to other Capitec clients only. 

The services are very similar at the core, allowing bank account holders to send money to a receiver’s mobile phone number via automated PIN codes. The receiver then withdraws cash at that bank’s ATM, or other channels. Because of their flexibility – they don’t require the recipient to have a bank account, the money is available instantly, and it is withdrawn as cash – most banks have charged a premium for the service (versus a typical electronic payment).

These have become very popular channels for transactions such as paying domestic help, remittances, or even sending money to friends. Businesses have adopted these services too, especially those who rely on low-skilled/temporary workers (think: builders, garden services). And, in some instances, they’ve also become a useful “get out of jail” card enabling a user to send money to themselves if they’ve forgotten/lost their wallet and only have their phone with them. What has diverged substantially is the costs of using these services (in all instances, the sender pays to perform the transaction).

Absa’s CashSend, however, treats the transaction in the same way the bank charges for ATM withdrawals (and it operates in practically the same way as it did upon launch nearly a decade ago). This means it is hands down the most expensive of the four (/five) for any transaction. Furthermore, it limits the amount per transaction to R1 000.

 

Below R1000

Above R1000

Absa CashSend

R8.50 + R1.40 per R100

FNB eWallet

R10.95

Nedbank Send-iMali

R8.50

R14

Standard Bank InstantMoney

R9.95

R11.95

Capitec (to other Capitec clients only)

R1.50

*Various limits exist per transaction, per day, and per month

In mid-2017, FNB flat-rated the pricing of its eWallet service, regardless of the amount being sent (previously, pricing was set according to different tiers). Both Standard Bank and Nedbank have different prices for transfers below and above R1 000, with Nedbank’s Send-iMali being noticeably pricier (aside from Absa). Capitec’s more restricted offering costs the same as making an electronic transfer or payment.

Comparing the cost of sending four different amounts of money shows just how uncompetitive Absa’s pricing structure is (and just how competitive Capitec’s more restricted offering is):

Cost to send money

R100

R500

R1000

R2000

Absa CashSend

R9.90

R15.50

R22.50

Not available*

FNB eWallet

R10.95

Nedbank Send-iMali

R8.50

R8.50

R8.50

R14

Standard Bank InstantMoney

R9.95

R9.95

R11.95

R11.95

Capitec (to other Capitec clients only)

R1.50

* Absa’s limit per CashSend transaction is R1 000

An alternate way of looking at this is by calculating the cost of sending money as a percentage of the money being sent.

Cost as percentage of money sent

R100

R500

R1000

R2000

Absa CashSend

10%

3.1%

2.25%

Not available

FNB eWallet

11%

2%

1%

0.5%

Nedbank Send-iMali

8.5%

1.7%

0.85%

0.7%

Standard Bank InstantMoney

10%

2%

1.2%

0.6%

Capitec (to other Capitec clients only)

1.5%

0.3%

0.15%

0.075%

Standard Bank has differentiated its InstantMoney offering by extending it to supermarkets and other retailers as a way of broadening its ATM footprint (critical for withdrawals). Money can be sent or redeemed via the bank’s electronic channels, selected Spar stores, Makro, Cambridge Foods and Choppies outlets as well as selected Game and Builders Warehouse/Superstore outlets. The other four banks rely mainly on their ATM networks for redemptions (FNB also offers withdrawals from selected Spar stores).

FNB has extended its eWallet product beyond a simple linear money-send offering, where the full amount has to be withdrawn at once. Rather, the eWallet exists as a “virtual account” which operates in a similar way to a normal bank account. Receivers get one free withdrawal (enabling them to cash out like with rivals’ offerings), but a receiver can also keep money stored in the wallet to cash out later (fees apply) and use it for prepaid airtime, data or electricity purchases via the bank’s channels. Standard Bank will soon offer a similar mobile wallet service.

Hilton Tarrant works at immedia. He can still be contacted at hilton@moneyweb.co.za.

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With the exception of Capitec, what a rip off by the other banks for what is an automatic process, the true cost of which is probably a fraction of a cent, never mind the escalation in cost for larger transfers, where no additional cost at all is incurred. A typical financial industry scam!

….then why don’t you send it by post and stop whinging.

Very relevant & practical article Hilton! 🙂

But it’s not as expensive as you may think….compared to (normal, with card) ATM Withdrawals. I’m with Nedbank. I draw cash for myself using iMali…sending myself the phone PIN 😉

I then I draw the (max allowed) of R2,500 cardless at any Nedbank ATM. The R2,500 withdrawal costs me R14 flat. Compared to if you make normal ATM (with card) withdrawal, I’ll then pay R41,50 (R5 flat + R1,50 for each R100). Big cash fee saving with Nedbank. Maybe with ABSA there’s no advantage?

And once R2,500 is withdrawn, I can pay cash for (small) bills, like restaurant/take-away meals (R150 – R250 range)…saving you R4 each time swiping your VISA-card at tillpoint. R4 as a cost-ratio of R200 spent = 2,0%. The R14 iMali cardless withdrawal cost me 0,56% (if you draw the max allowed). My bank fees come down (but it all depends on user profile).

Example, say I use my VISA-card to purchase 10 items at say R250 each = R2,500 overall spent…the combined card fees would be R4 x 10 = R40. (now compare that with R14 once-off Imali cardless R2,500 withdrawal for paying cash each time)

(…I know…not logic, as cash is supposed to be more expensive method, but as user I’ve experienced it different)

Plus, remember this: a cardless withdrawal to yourself is a better way of withdrawing (up to R2,5K limit), especially if your nearest ATM is located in dodgy part of town / or after dark. No card swapping can occur. Also with cardless withdrawal there’s zero risk of the machine swallowing your card / or getting stuck in ATM with a card-skimming device placed into slot by criminal. A major plus for crime-ridden SA.

ABSA is smoking socks… I see them more as a tollgate than a bank!

I travel to many countries in Africa and find that money transfer rates are far cheaper than in SA. In Kenya for example it is less than one percent.

But then they also have M-pesa which is used ubiquitously for everything, including Uber, restaurants and bars, side-of-the-road kiosk traders. This is so because the transfer costs are so low.

Many people find no need for bank cards at all – they’re seen as risky to carry. Getting a cellphone and the M-pesa app is much less hassle and cheaper than going through a bank.

End of comments.

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