Email
Password
Remember meForgot password?
    Log in with Twitter

article imageLower banking fees for South Africans

By Matthew Hendricks     Mar 26, 2013 in Business
Finweek Magazine reports on their investigation of tariffs asked by South Africa's four biggest banks, and the reasons why some are more affordable than others.
In advertisements, South Africa's banks promise the customers everything from all but being married to you today and tomorrow, to smart phones and tablet computers. Still, South Africans who have knowledge of the tariffs banks charge internationally, know that South African banks exploit their customers unconscionably.
Which are the lesser of the evils?
The Finweek Bank Charges Report leads to naming FNB (First National Bank) as the lesser expensive when it comes to individual transactions, although if you have do a lot of these transactions, you might do better with ABSA's package option. Standard Bank has been the worst of the four major banks, although due to a price decrease they are now slightly better than Nedbank, the latter now the most expensive bank for individual transactions.
Why do banks charge such high prices in South Africa?
Everything but banks have been blamed, including the country's expensive telecommunication, the great risk of transporting cash, the vulnerability of ATM's. Even the country's poor, who do not do big enough and numerably enough transactions to sustain our first world class banking system, so the "privilege" has to be dearly paid for.
And yet, last year, banks could afford to lower their fees somewhat. Why did it happen?
The greatest of many reasons is simply this: Public pressure. South African consumers have traditionally always just blindly accepted whatever is imposed on them. This trend is changing rapidly, bringing positive change for the consumer to the marketplace. Customers also now have social media to spread their experiences of bad service.
And of course, Finweek's yearly investigation the past 8 years about banking practices have also made a positive contribution to more affordable banking fees. It encouraged people to challenge the status quo.
Finweek doesn't believe though that there will be another drastic tariff decrease in the near future. Some banks may keep their tariffs the same for a year or two, but banks actually lowering their fees again seem improbable.
But, contrary to the current electricity supplier monopoly, there is competition in the banking sector.
My personal experience:
Unfortunately, Capitec Bank was mostly left out of Finweek's comparison research. For invididuals in their personal capacity, Capitec Bank might be even better. Personally, I know that the monthly fee just to have a savings account used to be at one point R10 with ABSA, and at the same time R4 with Capitec. Quite a difference there.
ABSA also charges a monthly subscription fee for internet banking access on top of transaction fees, while FNB and Capitec provide internet banking for free (only charging per transaction). Is ABSA beyond insane? I say yes.
While I was with ABSA, approximately a thousand and a half rands disappeared out of my account, I suspected stolen by one of their "fund managers" who avoided my enquiries about the matter. ABSA was useless, impersonal and dismissive in resolving the dispute, and it took 8 months to get the stolen money back with the help of the Ombudsman for Banking Services. Personally I will NEVER, EVER, EVER trust ABSA again.
It is obvious that my case isn't unique and other people have had problems with ABSA. The Ombudsman gets a lot of reports from furious banking customers:
How about personal attention?
The levels of service remains poor overall. Finweek's research shows that although banks promise their staff are better trained, there is simply so many tariff structures so complicated that staff in charge of handling customer enquiries, simply cannot keep up.
Usually they automatically recommend a package option based on your income rather than the way you use banking services. You need to be a genius to be able to compare and make out which option to choose that's best for you.
To see any improvement in banking services, the public will have to ruthlessly demand better and never, ever settle for being taken advantage of.
More about Banking, Bank, Greek banks, Fees, banking fees
More news from
Latest News
Top News