Little to no bank fees with these new accounts from banks
JOHANNESBURG - African Bank on Tuesday launched its transactional banking offering, MyWORLD, as takes on fierce competition from South Africa's established lenders and new contenders in the banking space with the bold claim of being "the cheapest transactional account in South Africa".
In a statement on Tuesday African Bank said up to five additional accounts can be opened under the main account — a total of six accounts, with no monthly account fees on any of the accounts.
"African Bank’s research into what South Africans want from their transactional bank revealed that people would like to transact and save together with their family, friends and their community and as individuals," it said.
Chief executive of of African Bank, Basani Maluleke, said, “When we compare ourselves to the Solidarity Bank Charges Report methodology, MyWORLD is the cheapest transactional account in South Africa."
“Our increased and diversified product offering, underpinned by our Omni-channel platform, will enable us to compete favourably against the established and emerging banks,” said Maluleke.
African Bank said the introduction of MyWORLD had elevated African Bank to a digital retail bank.
African Bank is upping its offering as it faces a pressurised banking environment, which has seen the traditional banks retrench workers and close branches amid a weak economy, as digital banking heats up and as the sector opens up to new players like Discovery Bank, Bank Zero and Tymebank.
The bank announcement also comes in the same week that established lender Standard Bank announced it was launching a new bank account, with a monthly fee of R4.95.
The account is called “MyMo”, and can be opened online by individuals with no monthly income. The account also offers the access to free data and airtime.
African Bank explained how the new account worked:
When an African Bank primary account holder opened MyWORLD account, can access to aprimary account and two types of Pockets — a Power Pocket and a Savings Pocket.
A Power Pocket comes with its own account number, debit card and PIN and earns 5.5% ( Nominal Annual Compounded Monthly,NACM) interest a year on positive balances.
“Our debit cards are personalised and embossed and are issued instantly on demand, in any African Bank branch — a first in South Africa,” said George Roussos, a group executive of digital and transactional banking at African Bank.
The Savings Pocket allowed the primary account holder to save at an interest rate of 6.5% (NACM) interest a year on any positive balance while enjoying immediate access to their funds.
A Pocket User, who can be anyone that the primary account dolder designated, could be added to both a savings pocket and a power pocket.
"User status allows the person full access to the Pocket. The Primary Account Holder can also decide who is responsible for the pay-as-you-use transaction fees on each Pocket.
As an added extra, the Primary Account Holder can add up to 10 Members on any Pocket. Member status allows the member to view the Pocket and to deposit, but not to withdraw or transfer any funds. This functionality can be utilised by informal savings clubs, church groups and any collection of people wishing to save together for a shared trip or activity," it said.
Accounts can be opened and managed using African Bank’s website, App, cellphone, in the branches and through contact centres.
A MyWORLD account holders only pay for what they use and a range of free transactions and low bank fees on other transactions are offered. All costs are transparently displayed, African Bank said.
The plethora of new banking accounts and entrants go along way to counter the concerns raised by a World Bank study into South African banking last year.
National Treasury and the Financial Sector Regulation Act last year published for public comment a diagnostic study prepared by the World Bank aimed at ensuring fairer retail bank practices in South Africa, titled “South Africa Retail Banking Diagnostic: Treating Customers Fairly in relation to Transactional Accounts and Fixed Deposits”. The study’s analysis and recommendations, the FSCA says, as well as public comments on the study, will help to shape the FSCA’S approach to regulating the banks.
The report said there appeared to be little difference between the features of accounts for low-income earners and those for higher-income customers, and pricing favours those who transact via electronic channels. However, the report said, at the lower level of the market there remains “a great propensity to transact in cash”, and clients using branch or ATM services pay disproportionately high fees for doing so. These banking costs can represent up to 10% of income for low earners, the report says. The pricing structures of middle-income accounts are complex, the report saaid, making it difficult for consumers to compare offerings among banks. Bundle pricing is intended to encourage the use of digital channels and discourage the use of traditional channels.