BANK?

Com­pe­ti­tion be­tween SA’s banks is get­ting fiercer. This can only be ben­e­fi­cial to the cus­tomer. If you want to switch banks, checks out your op­tions

CityPress - - Business And Tenders & Auctions -

If you have stayed loyal to your bank for a few years you may be pay­ing too much in ac­count fees. But the good news is that com­pe­ti­tion among the big four banks (Absa, FNB, Stan­dard Bank, Ned­bank) and Capitec, which has be­come a dom­i­nant player, is fierce. Other com­peti­tors are en­ter­ing the mar­ket too. If you are open to try­ing dif­fer­ent things, there are other com­pa­nies – par­tic­u­larly in the fin­tech space – that al­low you to trans­act in sim­pler ways. While some are ba­sic, they are bound to be­come more so­phis­ti­cated in their of­fer­ings in the fu­ture.

Which bank is the cheap­est?

When it comes to tra­di­tional bank­ing, Capitec’s Global One of­fers the cheap­est trans­ac­tional ac­count in gen­eral, ac­cord­ing to Sol­i­dar­ity’s 2016 Bank Charges re­port. The bank’s no-frills ap­proach and pol­icy of pay­ing in­ter­est (cur­rently at least 5.35%) on pos­i­tive bal­ances is what keeps it at the top of the af­ford­abil­ity list. And now that Capitec of­fers a credit card, it is bound to gar­ner even more at­ten­tion.

Run­ners-up in­clude FNB and Absa who have closely em­u­lated the Capitec model. Mean­while, Stan­dard Bank and Ned­bank are said to have ex­per­i­mented (and are still ex­per­i­ment­ing) with dif­fer­ent types of ac­counts.

What this means is that you can never be sure from one year to the next which bank will of­fer you bet­ter rates. It’s best to com­pare bank ac­counts at least on an an­nual ba­sis to en­sure you are still get­ting value for money.

Are banks the only op­tion?

With some banks tak­ing ad­van­tage of the com­mon­law set-off rule (which in ef­fect al­lows them to take your money to pay off your debt with­out your per­mis­sion), of­fer­ing poor ser­vice, al­low­ing il­le­gal debit or­ders, and fail­ing to pro­vide ad­e­quate se­cu­rity, it’s no won­der cus­tomers are look­ing at their op­tions out­side of tra­di­tional bank­ing and into the fin­tech space.

Glen Jor­dan, co-founder and direc­tor of IMB Fi­nan­cial Ser­vices, is con­vinced this is partly why his fin­tech firm – which en­ables cus­tomers to save their money and trans­act us­ing their cell­phones and a MasterCard – has landed 45 000 clients since launch­ing in 2014.

“We’ve all heard sto­ries about il­le­gal debit or­ders – it hap­pens all the time. You spend hours on the phone sort­ing it out.

“It gets re­versed and then you get charged for that too. Con­sumers change to es­cape debit or­ders, not be­cause of fees.”

IMB al­lows cus­tomers to trans­act through “wal­lets”, which al­low them to pay their bills, send money home and make Metro­rail ticket pur­chases. The nofrills of­fer­ing doesn’t al­low for debit or­ders.

And with re­tail­ers like Pick n Pay of­fer­ing a credit fa­cil­ity on their Smart Shop­per cards, it looks like the bank­ing space is set to be­come ever more com­pet­i­tive. Soon con­sumers will be even more spoilt for choice.

How do you make the switch?

If you are go­ing to stick with tra­di­tional bank­ing, switch­ing ac­counts can eas­ily be done on­line. How­ever, after fill­ing out the forms, it takes an av­er­age of 45 days to com­plete the process. But with a good un­der­stand­ing of the process, switch­ing doesn’t have to be scary or dif­fi­cult.

The best way to do this is to keep both new and old bank ac­counts open un­til debit or­ders and other trans­ac­tions have been switched to the right bank ac­count and all pay­ments in and out are op­er­at­ing smoothly.

“Check with your em­ployer from which date your salary will be paid into your new bank ac­count. Ow­ing to the fact that a num­ber of em­ploy­ers have pay­roll cut­off dates, your next salary may still be paid into your pre­vi­ous bank ac­count, with only the sub­se­quent one be­ing paid into your new bank ac­count,” says Ryan Prozesky, CEO of FNB Value Bank­ing Solutions.

Keep suf­fi­cient funds in your old bank ac­count to cover one month’s debit or­ders.

“This is to safe­guard against the ben­e­fi­ciary/ col­lect­ing com­pany not pro­cess­ing the new bank­ing de­tails by the time the debit or­der runs, and to en­sure that in the switch­ing process a vi­tal debit or­der isn’t missed,” ad­vises Prozesky.

Fi­nally, it’s im­por­tant to sup­ply the new bank with the cor­rect in­for­ma­tion when it comes to pol­icy num­bers, ac­count num­bers and your con­tact de­tails. While there are some banks that pro­vide debit or­der switch­ing ser­vices, in cer­tain in­stances, some ser­vice providers or hu­man re­sources de­part­ments won’t ac­cept in­struc­tions from the bank, which means that you will have to sub­mit the in­struc­tion your­self.

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