FNB eyeing Capitec’s lunch

THE BANKER TARGETS THE UNDERBANKED Set to be the only transactional bank account with no monthly fees and consumers will only pay per transaction.

FNB is joining the fight for entry-level banking consumers, with the launch of a new zero-monthly-fee transactional bank account aimed at the unbanked and underbanked.

eWallet eXtra, due to launch in June, is a combination of the bank’s existing eWallet remittance service and pay-asyou-use (Payu) transactional accounts. It’s set to be the only transactional bank account which carries no monthly fee, with consumers expected to pay only per transaction.

At R4.50 a month, Old Mutual’s Money Account is the cheapest bank account in South Africa, followed by Capitec’s R5.80 Global One Account. Capitec is widely considered the leader in the entry-level bank account market and was expected to grow its active client base to more than 10 million in March.

As per FNB’s estimates, the size of the unbanked and underbanked market, which it aims to serve, stands at more than 11 million. A 2016 Finscope study on financial inclusion found that 4.3 million adults are entirely excluded from the financial system, with only 58% of adults, excluding SA Social Security Agency (Sassa) card holders classified as banked.

Although FNB is the first local bank to offer an account which carries no monthly fee, chief executive Jacques Celliers insists it’s not a “one-dimensional” price player.

“Price is something you have got to get right. But we’re not a price play, we’re a value bank,” he said. “We look after relationships and we want to sell you lots of things.”

Celliers said they aren’t looking to sell credit to eWallet eXtra account holders, whose monthly income could fall between R0 and R7 000, and would rather cross-sell value-added products such as airtime and insurance. “If we can swing that eWallet relationship into a little banking relationship and on-sell, there is a massive business case.”

Pieter Woodhatch, chief executive of FNB Easy, under which the eWallet, Payu and basic bundle accounts fall, said the bank has about five million active eWallet users a month, of which 1.9 million don’t have an FNB account.

FNB also intends to grow its client base through the eWallet eXtra and work toward migrating account holders across its transactional bank account continuum as their needs change.

The new account is set to be entirely mobile and paperless, which will keep the bank’s client acquisition costs low. Accounts are expected to be opened in under three minutes.