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TWO WINNERS IN LOW-COST BANKING BATTLEGROUND

12/12/2018 00:44:00 BY Moneyweb

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SOUTH AFRICA – Entry-level bank account fees – Patrice Motsepe’s TymeBank seems to be the cheapest by far.

Two banks are clear winners between the seven that offer entry-level/vanilla bank accounts. A Moneyweb analysis of fees on these accounts, based on certain transactional behaviour, reveals a very competitive market. Aside from the ‘big five’, Old Mutual entered the space in 2015 with its Money Account (operated using Bidvest’s banking licence), while TymeBank (owned by African Rainbow Capital Investments) soft-launched in November.

The analysis was based on similar transaction profiles used by trade union Solidarity in its annual Bank Charges Report. There are two transaction profiles used, typical of those low-income customers who have fairly basic banking needs.

Ultra-low

These profiles are not entirely simplistic, nor for ultra-low income earners, as these needs are better met by other products.
The transaction profiles include card swipes at points of sale (POS), withdrawals at POS, a withdrawal at the bank’s own ATM, a balance cheque, electronic payments using app/internet banking, debit orders as well as SMS notifications for transactions (as well as for beneficiary payments). The monthly account fee is also included. This makes the comparison more meaningful than one just based on a list of fees

The first of the transaction profiles is based on 12 of the above per month, while the second is based on 17 (both including SMS notifications for each transaction).
l Capitec POS withdrawal at any PnP, Boxer, Shoprite or Checkers store.
l TymeBank POS withdrawal free at PnP or Boxer, balance enquiry free on the mobile app.
While TymeBank seems to be the cheapest, by far, it must be noted that the bank doesn’t (yet?) offer certain services, such as SMS notifications for payments (at least not according to its published account info and pricing structure).