Moving money is a costly exercise

INLSA

We pay outrageous bank fees to move our money in and out of our bank accounts – especially if you find yourself having to use another bank’s ATM to withdraw cash.

So, despite the alleged practical difficulties, I think national consumer commissioner Mamodupi Mohlala-Mulaudzi’s call on banks to display withdrawal fees on the ATM screens before the transaction is finalised is a good one.

Campaigning for the lowering of such fees – or at least not to link the fee payable to the amount being withdrawn – would be even better.

Moving money between bank accounts in different countries generates such massive bank fees, it’s hardly worth it, as Elsa Smith, who lives off a state pension, recently discovered.

In March her brother, who lives in New Zealand, transferred the equivalent of R250 in New Zealand dollars into her account, telling her that he had paid the transfer fees in full on his end – the equivalent of R134. But her bank, Absa, duly deducted R115 in fees from Smith’s account for the transaction.

“I find it quite unbelievable that we should jointly be charged R248 for the transfer of R250!” Smith said in an e-mail to Consumer Talk, having failed to get an explanation from Absa.

Responding to Consumer Talk’s query about this case, and the cost of transferring money internationally in general, Absa said while it couldn’t go into too much detail “publicly” about this case, the cost levied to Smith was “dictated by the transaction type (SWIFT) used by the sender, the sender’s bank as well as the fact that the sender opted to share the costs on the Absa customer”.

“It is imperative that the associated costs with cross-border money transfers are fully understood by the remitter and the beneficiary before transacting,” the bank said.

“The use of the SWIFT for low values transactions is not as optimal as other products, such as Western Union money transfers, which offer better affordability.

“The same transaction under Western Union would have been free for the Absa customer.”

A Western Union money transfer is quick, safe and free for the beneficiary of the funds transfer, Absa said.

Good to know.

Given that Smith’s brother was under the impression that he’d paid the transfer costs in full, he was clearly misinformed.

For the siblings to have to jointly pay R248 for the transfer of R250 is most certainly “not optimal”.

It’s ridiculous and renders the transfer a pointless exercise and colossal waste of money. As for our every day bank transactions, get a print-out of your monthly bank statement, grab a highlighter and mark every bank fee on it.

If you’re not on a package which charges you a flat service fee for a reasonable number of free transactions every month, you will have a lot of highlighter ink on your page, and you’d do well to approach your bank about a bank product which will lower your monthly costs.

Even if you’re on a package which gives you a certain number of free transactions every month, you’ll discover that withdrawing cash from an ATM that’s not operated by your bank is not free – in fact, it’s hellishly expensive.

The last time I did this – almost two years ago – I drew R1 000 from “another” ATM and was charged R21.45: R14.75 went to my own bank for a service which I get free from its own ATMs, and R6.70 went to the other bank as a Saswitch fee.

The same goes for penalty charges – have insufficient funds to meet a debit order or fail to pay the minimum amount on your credit card statement in full, and on time, and you’ll be hit with fees – hard.

The old-fashioned ways of banking are generally the most expensive in terms of fees. So avoid depositing cheques into your account – ask for the funds to be deposited via electronic funds transfer (EFT) instead – and avoid transacting face-to-face in your branch.