Capitec hikes account fee by 30%

Bank also launches cash back on all spend with revamped rewards programme…
Image: Supplied

Capitec Bank has increased the monthly admin fee of its Global One account by R1.50 or 30%, to R6.50 from March. This is the first increase since 2018. In 2019, the bank aggressively cut its monthly fee as well as other fees (including for electronic payments, debit orders and cash withdrawals at tills) to better compete in the entry-level banking segment. This move also came following TymeBank’s launch (in November 2018).

  2015 2016 2017 2018 2019 2020 2021 2022
Monthly admin fee R5 R5.25 R5.50 R5.80* R5 R5 R5 R6.50

* Originally R5.75 until VAT was increased to 15%

Across its 17-million-plus strong active client base (it reported 16.7 million retail bank clients by the end of August 2021), the increase in the monthly account fee equates to just more than R300 million in additional transactional income for the next 12 months. This may seem significant, but the bank’s net transaction income will likely be in excess of R11 billion for this fiscal.

Like rivals, Capitec kept most fees steady as the country – and world – entered Covid-19 lockdowns in 2020. This trend continued last year. The only main exception was the cost of withdrawing cash, at either its or other banks’ ATMs.

These annual increases for handling cash (withdrawals or deposits) are consistent across all major banks.

Cash-related fees will increase from March, with changes of between 3% and 9%, depending on the transaction.

The charge for withdrawing cash at partner retailer till points (at Shoprite Group and Pick n Pay/Boxer stores) will increase by 9% to R1.75.

It will also start differentiating between digital payments made to other Capitec accounts and those made to accounts at other banks. From March, the latter will cost R1.50, an increase of 50%. It recently enabled payments between customers via QR code in its mobile app. These remain free.

March 1, 2021 March 1, 2022 Change
Monthly admin fee R5 R6.50 30%
Cash withdrawal at till (PnP/ Boxer or Shoprite/Checkers) R1.60 R1.75 9%
Digital payment to other Capitec account R1 R1
Digital payment to other bank R1 R1.50 50%
Debit order R3.50 R3.50
Immediate payment (to other bank) R7.50 R7.50
Cash withdrawal at Capitec ATM R7.50 per R1 000 R8 per R1 000 7%
Cash withdrawal at other bank’s ATM R9.75 per R1 000 R10 per R1 000 3%
Send cash (R40 to R1000) R7.50 R8 7%
Send cash (R1010 to R3000) R15 R16 7%
Credit card (monthly admin fee) R40 R45 13%

These pricing changes come as the bank tweaks its Live Better rewards programme. From March, qualifying clients can receive 0.5% cash back on all their monthly debit card spend. Credit card customers get an additional 1% cash back for spend on that card.

Customers need to activate their Live Better Savings account on the bank’s app.

They also need to do the following each month:

  • have one active credit product, funeral plan or fixed savings account
  • have three debit orders
  • perform five ‘money out’ transactions on the app (such as payments, scan to pay, or buying prepaid airtime and data)

This is clearly designed to further incentivise customers to use less cash.

In an example shared with the media, it says a so-called typical ‘digital user’ with R10 000 in monthly spending will pay R35 in fees per month.

  • Monthly fee: R6.50
  • 17 card payments (free): R0
  • 30 in-app messages (free): R0
  • 2 cash withdrawal at supermarket tills: R3.50
  • 7 digital payments to Capitec clients: R7
  • 1 immediate payment: R7.50
  • 3 debit orders: R10.50
  • 1 credit product, savings plan or funeral plan

It says this client will get R161 a month – R150 in cash back (Live better at 0.5% (R50) + the additional 1% (R100) for this spend being on a credit card), plus interest of R11 earned on R5000 in main account.

Executive of Marketing and Communications at Capitec, Francois Viviers says the bank’s research shows that people are “tired of traditional tiered rewards programmes. Our programme doesn’t discriminate based on income or status; has no points, no tiers, no subscription fee and no complicated hoops to jump through.”

Cash back earned is paid into the Live Better savings account on the 10th of the following month.

In simple terms, R10 000 in spend per month will translate into R50 back on a debit card or R150 back on a credit card.

The bank says its Live Better rewards programme already has over 4.5 million registered users and has delivered over R300 million in savings to these customers since June.

By the end of the first year – in other words, by June – it intends to “reach R1 billion in cash back and savings for our clients”.

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if it is the first increase since 2018, it is unfair of you to have a headline of a 30% increase. we expect better from you

Are they trying to paper over a deeper loan non-repayment malaise?

What interests me is when did the “ Boardroom buddies” know about this potential 30% increase? Before or after they sold some of their massive holdings? Just saying….

End of comments.

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