FNB has dropped fees on all accounts for the withdrawal of cash at partner retailers from July 1.
The move will further incentivise the use of this channel at Shoprite, Checkers, Pick n Pay, Boxer and selected Spar stores. By contrast, fees for withdrawing cash at its ATMs or at those of other banks will increase by 5% next month.
Given the impact of Covid-19, the bank will not increase monthly account fees on its Easy, Gold, Premier, Private Clients, Private Wealth and RMB Private Bank accounts. Yashen Singh, CEO of Premier Core Banking, says the environment has “certainly tested how we can respond to customers’ needs and help them in this difficult time”.
One account that sees a reduction in the monthly fee is Gold Fusion, where the charge drops from R109 to R89.
This is a clear sign that the bank is actively targeting this middle-market segment with this hybrid cheque and credit card account. Additionally, Fusion customers on both Gold and Premier are able to earn rebates on monthly fees for personal loan and revolving facility products.
Along with these changes, it has also removed the fees for airtime purchases in its digital channels for all customers (previously, there were charges on entry-level accounts). And it has bundled in two free monthly eWallet sends on the entry-level bundle (Easy Smart). This was introduced last year on Gold accounts upwards (to Private Wealth) and has helped further reduce the need for cash.
Cash withdrawal fees have increased by a steep 33% on its Easy pay-as-you-use account to R8 per R1 000, plus the limit that this fee structure applies to has been reduced from R2 000 to R1 500. Thereafter these customers will pay the standard R2 per R100.
|Gold, Premier, Private Clients, Private Wealth||July 1, 2020||July 1, 2019|
|FNB ATM cash withdrawal||R2 per R100||R1.90 per R100|
|Other bank’s ATM cash withdrawal||R10 + R2 per R100||R9.50 + R1.90 per R100|
The bank will argue that many customers don’t pay cash fees as it introduced a monthly amount of ‘free’ cash withdrawals from July last year. However, from July 1 this threshold has been reduced on three of its five bundled accounts. The cut from R6 000 to R4 000 on Premier is particularly telling, indicating that it is using this lever to incentivise Cash@Till withdrawals for this segment.
|Bundled free monthly cash withdrawals*||July 1, 2020||July 1, 2019|
|Easy Smart||R2 000||R2 000|
|Gold||R3 000||R4 000|
|Premier||R4 000||R6 000|
|Private Clients||R9 000||R10 000|
* At FNB ATMs, cardless cash, Cash@Till
The reason behind FNB’s strong push to incentivise customers to withdraw cash at retailers is simple: it costs the bank far less per transaction.
Even though the bank will pay these retailers a fixed nominal fee for each withdrawal, it reduces the cost of cash for the bank itself. Less cash in the ATM network, with the associated security costs (for transport and for physical infrastructure), will result in significant cost reductions.
Don’t check your balance at the till though, as this will attract a R1.75 charge!
* The bank has also made a number of changes to its industry-leading eBucks rewards programme. These will be explained on Moneyweb later this week.