Digital entrants like Tyme Bank and Bank Zero have influenced the increase of competition in the South African banking market. Their zero monthly fees and a host of free transactions have hipped pressure on traditional banks.
In 2019 there was stiff competition with new accounts targeting the entry-level markets.
Digital banks entered the market with their eye on signing up huge numbers of low-income earners.
Offering zero monthly fees and a lot more good deals, this, in turn, has put traditional banks under pressure as they are not able to offer the same fees.
This 2020, most banks (ABSA, FNB, Standard Bank, Nedbank and Capitec) have revised their entry-level accounts to keep relevancy in the low-income market.
ABSA has also revised its fees and published the price cuts adopted in their entry-level transact debit account.
Well, the entry-level banking clients are benefiting from these new fees, however, we cannot say the same about mid-level to high-level banking clients.
Below we show you ABSA’s scheduled monthly account fees for 2020 and the changes made:
- Transact Account is now R4.90 from R5.30
- Flexi Account is up to R29 from R26
- Gold PAYT R50 from R48
- The Gold Value Bundle is now R109 from R107
- While Premium Banking went from R179 to R190
This is the basic ABSA account designed to make it easy for new clients to start formal banking at a low cost.
- Your valid South African Identity Document
- Proof of residence that is not older than 3 months
- A minimum of R20 to be deposited into your account to keep the bank account active.
Since the product is targeted at the entry-level market, the Absa transact account is accessible for customers with less than R3000 monthly income.
Should you exhibit higher transactional activities, like, more than R5000 per month for 3 consecutive months, the bank moves you to their Flexi account.
- As any transact debit account is expected to function, you can make withdrawals, deposits, transfers, account payments and statements at any Absa ATM
- Absa transact debit account offers you unlimited balance enquiries at Absa ATMs and from supporting retailer counter tills
- With the CashSend feature, you are able to send money to people even to those without bank accounts
- Topping up of prepared electricity or airtime can be done straight from your account
- You are able to keep a record of all your transactions with the aid of the NotifyMe SMS and email notifications sent to you
- The debit card can be swiped countless times with no limitations or restriction in the swiping frequency
- Using the “bank on me” feature, you are able to pay banking fees for another customer
- There are rewards and discounts given to you whenever you are using your visa card to pay for your travel costs
- You can manage your account using the Absa online, mobile and telephonic banking services
- Borrowing the Absa loans becomes easy as the assessment of you funds become he account is accessed anytime you need
Cash withdrawal fees
- Cash withdrawals you make from a bank counter tends to cost you more on fees, it doesn’t matter which bank in particular. Absa charges R75 + R2,10/R100 on all branch counter withdrawals.
- Absa ATM withdrawals cost R6,00 for every R1000
- Point of Sale (POS) cost R1
- Absa supported ATMs are R6 per R1000, while Switch ATMs or Post Office terminals cost R11,50 + R2,00/R100
- Overseas withdrawals made from your visa card cost R75
- Cheque deposits made over the Branch counter are R60, while cash will be R60 + R2,00/R100
- Cardless cash deposit (Cash acceptor) and Absa ATM cash deposits cost R2 per R100 deposited
Account payments and funds transfers
- There is no charge whenever you are transferring funds using an Absa ATM, Online, Mobile or Telephone (IVR)
- Funds transferred over the branch counter cost R75 while transferring with the aid of a telephone adviser will cost you R7
- Sending cash using CashSend from Absa ATM, Mobile or Online costs R6 per R1000
Competitive advantages of the Absa transact account
- Their reduced fees have paved way for newcomers, making it affordable to transact using formal banking services
- The fact that the account accommodates even R0 monthly income earners allows everyone over the age of 18 to open their own bank accounts
- There is no limit of swiping your card, allowing people to carry less cash in their pockets and adapt to plastic money
- Zero subscription fee for Absa Online, mobile and telephone banking
Competitive Disadvantages of the Absa transact account
It is only accessible when your income is less than R3000, the moment your transactional activities exceed R5000 for 3 months, the bank moves you to a higher tier product.
The Absa transact account is a competitive product to counter pressures caused by the entry of digital banks in the market.
The product is designed in a way that will lure newcomers and give them an opportunity to a manageable bank account.
However, the account fees have been reduced at the expense of other bank products in the high tiers.