Solidarity Research Institute (SRI) has recently published its latest Banking Charges report, which looks at pricing across South Africa’s major banks based on market characteristics.
In its 2021/22 report, Solidarity commended online banks as the “heroes” of the year, stating that new entrants into the banking sector, such as TymeBank and Bank Zero, are particularly disruptive with zero-fee banking options and the use of mobile technologies to handle money.
Although banks are becoming more competitive in terms of added value, such as incentive programs, expenses, according to the organization, continue to be a deciding factor. According to the survey, it is also clear that competition in the banking sector is expanding.
When it comes to costs alone, the new online banks that compete only on price are by far the clear winners. Tyme Bank or Bank Zero charges R21.50 or R25 for a list of 25 transactions that would ordinarily cost between R99 and R143 at standard banks.
Comparing banking fees
Solidarity’s banking charge comparison is based on four different transaction profiles grouped into four categories. Low-cost or entry-level banking is often associated with the 12 and 17 transaction profiles, middle-market accounts with the 25 transaction profile, and premium accounts with the 30 transaction profile.
There are less cash transactions on this year’s transaction list. Money transfers using cell phone numbers and online transfers have largely surpassed previous methods. With the exception of the most basic transaction accounts, the latter is now free for all accounts.
Accounts fees with low income
Absa and Capitec offer the cheapest low-cost accounts among the big banks, with Absa charging R37.10 for a basket of 12 transactions. Capitec is in second place, charging R37.90, which is 80 cents more.
Capitec won the 17-transaction category, collecting a total of R42.90 for that set of transactions. FNB’s Easy PAYU account comes in second place with a total of R54.45. Furthermore, Capitec is the only major bank that pays interest on transaction accounts.
Accounts fees for the middle incomes
FNB came out on top for the regular middle-class client, who is typically handled by major banks, with its FNB Aspire Current account.
It is, like the other accounts in this category, a bundled account with a predetermined balance that comprises a series of free transactions, according to Solidarity. FNB is by far the winner in this category because all of the transactions on our list are included in the preset cost of R99.
Standard Bank’s MYMO Plus account comes in second with a charge of R129.40.
Premium banking fees
With a charge of R236 for the list of 30 transactions, FNB’s Fusion Premier account takes first spot for premium – or “sophisticated” banking requirements.
Absa Premier Banking comes in second with a total cost of R242.50.
Because they offer more free transactions than Nedbank and Standard Bank, each of these institutions offers good value.
Digital banking fees
The online/digital banking market has only four accounts: TymeBank, Bank Zero, Spot Money, and Discovery Bank’s Gold account.
These banks are only accessible online and have no physical premises. In addition, they have fewer ATMs and employ fewer employees than traditional banks. As a result, the customer’s costs will be reduced.
Although Spot Money provides some banking services to its customers, it focuses on cashless transactions and differs from the typical traditional transactional products and services that physical banks provide.
Discovery is the most expensive digital bank when compared to TymeBank and Bank Zero – while Solidarity points out that even at R90, it is still less expensive than many traditional banks’ offers.
