FNB cuts fees as price ‘war’ heats up
The pace of the banking price war is picking up with First National Bank the latest player to enter the fray.
FNB, which is owned by SA’s biggest banking group by market capitalisation, FirstRand (R359bn), has cut the monthly fee on its entry-level pay-asyou-use account to 5c below the R5 charged by Capitec.
Its 2019 pricing brochure comes with numerous other fee cuts, including reductions in certain bundle account fees.
Cash withdrawal fees at till points have also been slashed to just R1.
FNB is the third of the big four banks to react to increasing competition by cutting fees or launching new zero-fee accounts. Nedbank was the first to remove fees altogether on its entry-level account in April, while Standard Bank launched a R4.95-per-month account last week.
Together with other benefits this will effectively see it paying customers to bank there.
Standard Bank is offering more in data and airtime benefits than what a customer will pay in monthly fees for the new account.
FNB and Standard Bank have now undercut Capitec, which used to be SA’s cheapest bank.
It indicates just how important it has become for banks to cut every cent they can on fees as new entrants, including Tymebank and African Bank, are charging zero monthly fees.
FNB’s entry-level account fees dropped to R4.95 a month from R5.75. The bank reduced monthly fees for the bundle option of the entry-level account by R9.
Like Standard Bank, FNB will also offer data and airtime, but only to customers with bundle accounts.
The entry-level bundle account now costs R59, down from R65 in 2018.
Banks’ bundle accounts see customers paying a flat fee every month for a certain number of withdrawals, debit orders and other transactions. But unlike Standard, which says only new entry-level customers will reap the free airtime benefits, FNB is rolling it out to all bundle customers.
“If you think about what some banks are doing, they offer a lot of benefits on one account. We are giving this benefit across all bundles,” said Christoph Nieuwoudt, FNB’s CEO of consumer banking.
“We can fund all of that because we are leveraging the connected business ecosystem that we have. It’s internally developed. We own the IT infrastructure.”
Nieuwoudt said the bank had aggressively revamped its offering to provide more value to customers because it did not want to just compete on price.
FNB is also planning to turn its zero-fee mobile eWallet eXtra account into a fully fledged transactional account.
It indicates just how important it has become for banks to cut every cent they can on fees