December 11 2011 at 12:05pm
By Angelique Arde
Following Personal Finance’s lead story looking at methods of paying for petrol and the associated costs – Standard Bank says it is reviewing its position on the fees and interest it charges clients who use a credit card to pay for petrol.
Personal Finance reported that the big four retail banks, including Standard Bank, all treat petrol purchases on a credit card like any other retail purchase: in other words, there is no transaction fee and clients enjoy the usual interest-free period applicable to their card.
However, in response to the story, readers who bank with Standard Bank reported that they are charged transaction fees and interest from day one when paying for petrol with their credit cards.
Although the information carried in the story was supplied and checked by Standard Bank before publication, it was incorrect.
In fact, Standard Bank charges a transaction fee of R3.85 and interest from the time of purchase when you buy petrol on your credit card.
Sugendhree Reddy, the director of banking products at Standard Bank, says that “no one at the bank knew” that charges and interest apply to fuel purchases on the bank’s credit cards.
She says queries by Personal Finance readers have “raised a red flag within the bank”.
“We acknowledge that fuel purchases on a credit card are treated as a cash advance, meaning we charge a transaction fee and interest from the transaction date. But Standard Bank is reconsidering its position. We would have to make system changes, which take time, but by the end of January we would like to have rectified this,” Reddy says.
The Payments Association of South Africa (Pasa) is tasked with ensuring that South Africa’s payments system is world-class and aligned with the South African Reserve Bank’s policies and principles in respect of the National Payment System.
According to Pasa, “a fuel purchase must be treated as a retail purchase” and not as a cash withdrawal, Arif Ismail, the executive of payments strategy, research and communication at Pasa, says.
But Pasa does not regulate pricing – it is up to each bank to decide what it charges for a retail purchase, Ismail says.
Typically, banks do not charge clients a swipe fee for purchases on a credit card, and Standard Bank’s charge for fuel purchases on its credit cards appears to be the only anomaly.
Personal Finance contacted Absa, First National Bank (FNB) and Nedbank again this week to verify the accuracy of information supplied for last week’s article. All three banks confirmed that they treat petrol purchases on a credit card as regular retail purchases and not as cash withdrawals.
The law no longer prohibits petrol from being sold on credit.
In July 2009, the Department of Energy introduced a regulation under the Petroleum Products Act allowing for the use of payment cards to pay for petrol products.
Up until the regulation was passed, South Africa was one of a few countries in the world which prohibited the buying of fuel on credit, “and it was an absurdity”, Tony Twine, a senior economist and director of Econometrix, says.
“The regulation (9117) does not force the banks to treat petrol sales as extensions of cash credit,” Twine says.
Getting clear and accurate information from the banks is not easy. Be prepared to mine your bank’s website and brave its call centre. Call centre staff are often not adequately informed. An operator at FNB card division yesterday gave inaccurate information – checked by his supervisor – to Personal Finance telephonically and via email.
www.iol.co.za
Monday 12 December 2011
Poor snub Mzansi account
By: Andile Ntingi
2011-12-11 12:49
Johannesburg - The Mzansi account is on the brink of extinction.
Launched by major banks in 2005 amid fanfare, the low-cost bank account is quietly being dumped because it is expensive to roll out and consumers are shunning it for affordable new-generation products that allow them to transact more and qualify for bigger loans.
The 2011 FinScope survey, published this week by the FinMark Trust, noted Mzansi’s rapid decline as more and more accounts became dormant.
“The research indicates that banks seem to be encouraging their clients less to take up Mzansi accounts than in 2010. It is also often the case that the banks will persuade clients not to open this account,” FinMark Trust said this week.
According to the FinScope study, Mzansi reached its zenith last year when 5 million customers were reportedly using the account. But the number of account holders plummeted 36% to 3.2 million this year.
Despite this drop, the number of banked South Africans has remained stable, with 62.8% of the adult population, or 21.2 million people, still being served by the banking sector.
Major lenders - such as Standard Bank Group [JSE:SBK], First National Bank (FNB) and Nedbank Group [JSE:NED] - confirmed this week that there was a shift away from Mzansi to other advanced low-cost options. Standard Bank and FNB went so far as declaring that the Mzansi account was on its way into obscurity.
But the country’s largest bank, Absa Group [JSE:ASA], said it had seen a growth in customers signing up for the product at its branches.
Leon Barnard, the director of inclusive banking at Standard Bank, said the lender would stop selling Mzansi from early next year.
“Mzansi brought awareness in the market, but we have moved on since then. Our model is based on including more people in the financial system, much more than Mzansi allowed,” he said.
Gift Manyanga, the chief executive of FNB’s low-cost branches, known as EasyPlan, said customers had been migrating en masse from the Mzansi account to other affordable products because Mzansi carried the “stigma of being a poor man’s product”.
“If the rate of migration from the Mzansi account to other products continues, Mzansi will fade away,” said Manyanga.
“Despite the drop in the use of Mzansi accounts, banks are still catering for low-income customers. New customers also prefer more advanced products than the Mzansi account.”
Anton de Wet, the managing executive of personal banking at Nedbank, said the bank was experiencing a shift away from Mzansi, but he was not sure if this was a signal of the beginning of the end for the product.
“We are still selling the Mzansi account, but we are selling the Keyona (Nedbank’s low-cost product) three times more than the Mzansi,” he said.
Absa said its Mzansi sales were growing. not shrinking.
Harriet Heymans, the managing executive responsible for pricing and products at Absa, said she did not foresee the abolishment of the Mzansi account anytime soon.
“What is important to remember is that Mzansi works well for a specific sub-segment of customers. These are customers who only require access to basic financial services.
"We have other products that customers with slightly more sophisticated financial needs can consider,” she said.
“We carefully consider a customer’s needs and behaviour before offering them an account. If their needs are most appropriately serviced with Mzansi, then we will offer the customer the Mzansi account,” Heymans said.
Jabu Khumalo, a research specialist at the FinMark Trust, said: “Postbank is the only bank that is pushing the Mzansi account in the market, but other banks are moving away from it.”
- City Press
2011-12-11 12:49
Johannesburg - The Mzansi account is on the brink of extinction.
Launched by major banks in 2005 amid fanfare, the low-cost bank account is quietly being dumped because it is expensive to roll out and consumers are shunning it for affordable new-generation products that allow them to transact more and qualify for bigger loans.
The 2011 FinScope survey, published this week by the FinMark Trust, noted Mzansi’s rapid decline as more and more accounts became dormant.
“The research indicates that banks seem to be encouraging their clients less to take up Mzansi accounts than in 2010. It is also often the case that the banks will persuade clients not to open this account,” FinMark Trust said this week.
According to the FinScope study, Mzansi reached its zenith last year when 5 million customers were reportedly using the account. But the number of account holders plummeted 36% to 3.2 million this year.
Despite this drop, the number of banked South Africans has remained stable, with 62.8% of the adult population, or 21.2 million people, still being served by the banking sector.
Major lenders - such as Standard Bank Group [JSE:SBK], First National Bank (FNB) and Nedbank Group [JSE:NED] - confirmed this week that there was a shift away from Mzansi to other advanced low-cost options. Standard Bank and FNB went so far as declaring that the Mzansi account was on its way into obscurity.
But the country’s largest bank, Absa Group [JSE:ASA], said it had seen a growth in customers signing up for the product at its branches.
Leon Barnard, the director of inclusive banking at Standard Bank, said the lender would stop selling Mzansi from early next year.
“Mzansi brought awareness in the market, but we have moved on since then. Our model is based on including more people in the financial system, much more than Mzansi allowed,” he said.
Gift Manyanga, the chief executive of FNB’s low-cost branches, known as EasyPlan, said customers had been migrating en masse from the Mzansi account to other affordable products because Mzansi carried the “stigma of being a poor man’s product”.
“If the rate of migration from the Mzansi account to other products continues, Mzansi will fade away,” said Manyanga.
“Despite the drop in the use of Mzansi accounts, banks are still catering for low-income customers. New customers also prefer more advanced products than the Mzansi account.”
Anton de Wet, the managing executive of personal banking at Nedbank, said the bank was experiencing a shift away from Mzansi, but he was not sure if this was a signal of the beginning of the end for the product.
“We are still selling the Mzansi account, but we are selling the Keyona (Nedbank’s low-cost product) three times more than the Mzansi,” he said.
Absa said its Mzansi sales were growing. not shrinking.
Harriet Heymans, the managing executive responsible for pricing and products at Absa, said she did not foresee the abolishment of the Mzansi account anytime soon.
“What is important to remember is that Mzansi works well for a specific sub-segment of customers. These are customers who only require access to basic financial services.
"We have other products that customers with slightly more sophisticated financial needs can consider,” she said.
“We carefully consider a customer’s needs and behaviour before offering them an account. If their needs are most appropriately serviced with Mzansi, then we will offer the customer the Mzansi account,” Heymans said.
Jabu Khumalo, a research specialist at the FinMark Trust, said: “Postbank is the only bank that is pushing the Mzansi account in the market, but other banks are moving away from it.”
- City Press
Thursday 08 December 2011
Cellphones as payment devices
2011-12-06
Absa Bank embarks on South Africa’s first live NFC trial that enables cellphones as payment devices
Absa today announced the launch of South Africa’s first live user trial of Near Field Communication (NFC) technology on mobile phones. The trial will kick off in mid-December and involve 500 of the bank’s own staff members, operating in a live commercial environment.
“Absa is the first institution in South Africa to bring Near Field Communication (NFC) capabilities with an EMV (Europay, Mastercard and Visa) card payment application to a handset,” says Arrie Rautenbach, Head of Retail Markets at Absa.
He adds: “The trial paves the way for consumer market utilisation of the mobile phone as a payment device by using the revolutionary NFC technology. While this trial will facilitate low value payments in retail and transit in early stages, we envision many more exciting new forms of mobile payment in the future.”
Absa, in partnership with Mastercard, have embedded their Paypass Tap and Go™ payment card on the handsets for the trial. This will allow trial participants to load funds into a prepaid store of value on a secure element on the phone, at point of sale, through Absa Online or at Absa ATMs.
The mobile payment system also contains the National Department of Transport data structure which will, in future, facilitate more advanced payments in transit. The application on the phone will store details of the commuter, the day and time, where they entered and exited the transit system - and use this information to calculate the fares.
Adrian Vermooten, Deputy Managing Executive of Absa Digital Banking, explains that all the payment and NFC services that are available on the handset will be accessed from the mobile phone’s main menu, in addition to information about each service and customer support.
“By simply tapping one’s phone in front of a contactless NFC-enabled pay point, the value of the transaction will instantly be debited from one’s bank account,” states Vermooten.
From the customer’s perspective, the benefits of NFC will include faster transactions, shorter queues, increased levels of security and the ability to electronically track their spending habits.
Vermooten adds that the trial will enable participants to pay for goods at coffee shops, canteens, and later, at other service providers that are located at Absa’s head office in central Johannesburg.
Research In Motion’s Blackberry models will be the initial handset for mobile payment trials. The Blackberry device will be equipped with an NFC wireless chip, making it well-suited for mobile payments.
Today’s announcement follows Absa’s pioneering of the "tap-and-go" technology which is equipped to make payments by means of tapping cards on a reader. The NFC trial uses the same readers to accept payments from smart-phone devices that are enabled with the NFC technology.
“Both technologies are exploring new ways to add convenience and value to payments, typically leveraging off the NFC technology for mobile phones to breathe new life into ‘tap, pay and be on your way’ payment capabilities,” Vermooten says.
“This trial is going to provide key insights which will prove crucial to refining the customer experience as we bring NFC on mobile to market,” adds Vermooten, adding that “we are currently at the start of this journey”.
In time to come, consumers will store any type of payment cards in their mobile wallet on their handsets, and either pay online by tapping the phone on a merchant’s reader or on a person-to-person basis,” he explains. “This new technology is paving the way and building acceptance networks for mobile payments in future.”
Absa has worked extensively over the past few years with its global parent company Barclays, through its card division Barclaycard, who are global leaders in contactless and this form of mobile payment. Earlier in the year, Barclaycard released an NFC mobile payment product with Orange, the UK mobile network operator. “Our relationship with Barclaycard has provided our Absa team with both the inspiration and the expertise that is necessary to make this new payment form a reality.” says Rautenbach.
He notes that international experience and various research papers have shown that for NFC to become a reality, the close cooperation of major players in the “NFC ecosystem” such as banks, network operators, retailers, cellular handset manufacturers, information technology partners and other players with an interest in creating a customer-focused NFC solution, is required.
“As we learn from the practical, hands-on experiences of the trial, we will continue our discussions and deepen our relationships with the major players in the ‘NFC ecosystem’ to develop the commercial models, and extend the variety of payments instruments made available by the wallet,” says Rautenbach.
In July this year, Absa and Vodacom announced the formation of a strategic alliance to accelerate the pace of innovation in mobile financial services. One of the focus areas of this alliance is NFC.
www.absa.co.za
Absa Bank embarks on South Africa’s first live NFC trial that enables cellphones as payment devices
Absa today announced the launch of South Africa’s first live user trial of Near Field Communication (NFC) technology on mobile phones. The trial will kick off in mid-December and involve 500 of the bank’s own staff members, operating in a live commercial environment.
“Absa is the first institution in South Africa to bring Near Field Communication (NFC) capabilities with an EMV (Europay, Mastercard and Visa) card payment application to a handset,” says Arrie Rautenbach, Head of Retail Markets at Absa.
He adds: “The trial paves the way for consumer market utilisation of the mobile phone as a payment device by using the revolutionary NFC technology. While this trial will facilitate low value payments in retail and transit in early stages, we envision many more exciting new forms of mobile payment in the future.”
Absa, in partnership with Mastercard, have embedded their Paypass Tap and Go™ payment card on the handsets for the trial. This will allow trial participants to load funds into a prepaid store of value on a secure element on the phone, at point of sale, through Absa Online or at Absa ATMs.
The mobile payment system also contains the National Department of Transport data structure which will, in future, facilitate more advanced payments in transit. The application on the phone will store details of the commuter, the day and time, where they entered and exited the transit system - and use this information to calculate the fares.
Adrian Vermooten, Deputy Managing Executive of Absa Digital Banking, explains that all the payment and NFC services that are available on the handset will be accessed from the mobile phone’s main menu, in addition to information about each service and customer support.
“By simply tapping one’s phone in front of a contactless NFC-enabled pay point, the value of the transaction will instantly be debited from one’s bank account,” states Vermooten.
From the customer’s perspective, the benefits of NFC will include faster transactions, shorter queues, increased levels of security and the ability to electronically track their spending habits.
Vermooten adds that the trial will enable participants to pay for goods at coffee shops, canteens, and later, at other service providers that are located at Absa’s head office in central Johannesburg.
Research In Motion’s Blackberry models will be the initial handset for mobile payment trials. The Blackberry device will be equipped with an NFC wireless chip, making it well-suited for mobile payments.
Today’s announcement follows Absa’s pioneering of the "tap-and-go" technology which is equipped to make payments by means of tapping cards on a reader. The NFC trial uses the same readers to accept payments from smart-phone devices that are enabled with the NFC technology.
“Both technologies are exploring new ways to add convenience and value to payments, typically leveraging off the NFC technology for mobile phones to breathe new life into ‘tap, pay and be on your way’ payment capabilities,” Vermooten says.
“This trial is going to provide key insights which will prove crucial to refining the customer experience as we bring NFC on mobile to market,” adds Vermooten, adding that “we are currently at the start of this journey”.
In time to come, consumers will store any type of payment cards in their mobile wallet on their handsets, and either pay online by tapping the phone on a merchant’s reader or on a person-to-person basis,” he explains. “This new technology is paving the way and building acceptance networks for mobile payments in future.”
Absa has worked extensively over the past few years with its global parent company Barclays, through its card division Barclaycard, who are global leaders in contactless and this form of mobile payment. Earlier in the year, Barclaycard released an NFC mobile payment product with Orange, the UK mobile network operator. “Our relationship with Barclaycard has provided our Absa team with both the inspiration and the expertise that is necessary to make this new payment form a reality.” says Rautenbach.
He notes that international experience and various research papers have shown that for NFC to become a reality, the close cooperation of major players in the “NFC ecosystem” such as banks, network operators, retailers, cellular handset manufacturers, information technology partners and other players with an interest in creating a customer-focused NFC solution, is required.
“As we learn from the practical, hands-on experiences of the trial, we will continue our discussions and deepen our relationships with the major players in the ‘NFC ecosystem’ to develop the commercial models, and extend the variety of payments instruments made available by the wallet,” says Rautenbach.
In July this year, Absa and Vodacom announced the formation of a strategic alliance to accelerate the pace of innovation in mobile financial services. One of the focus areas of this alliance is NFC.
www.absa.co.za
Financial exclusion up, formal inclusion unchanged
While overall levels of formal financial inclusion in SA were stable compared to 2010 figures, the FinScope 2011 survey - released on Wednesday - found that the percentage of adults who were financially excluded had increased.
While 73% of adults were financially included - meaning they used financial products from the formal or informal sectors, 68% used formal financial products - mainly from banks.
However, the survey concluded that there had been a decrease in the informally served market, leading to a rise in the number of South Africans that were financially excluded and who kept money in a safe place at home.
According to the survey, 27% of South African adults (just over nine million) were financially excluded in 2011, up from 23.4% (almost eight million) in 2010.
The survey also found that Mzansi account awareness and usage had decreased from last year.
"This raises an important question that needs to be understood further and that is: Are banks substituting Mzansi accounts with in-house entry level banking products or are Mzansi accounts becoming dormant?"
FinScope said this was "significant" especially since the Financial Sector Charter required the banking sector to make banking more accessible to South Africans.
It was found that 36% of individuals had never heard of the account before and those who used it, often indicated that it was their first account.
The majority of individuals who had not heard of Mzansi fell within the LSM [living standards measure] four to six range.
"This particular market is concerned with fees, and trust in a product, and in financial institutions will impact decision-making.
"Furthermore, the research indicates that banks seem to be encouraging their clients less to take up Mzansi accounts than in 2010. It is also often the case that the banks will persuade clients not to open this account."
The survey also found that 57% of the adult population in the country did not have any form of insurance in 2011 compared to 50% in 2010.
The percentage of South African adults making use of formal insurance products also dropped from 40% in 2010 to 34% in 2011.
"Perceptions of insurance products are generally quite positive and they are mainly associated with protection from risk, safety and reliability.
"On a functional level, insurance seems to be more likely to be associated with funeral cover, followed by an understanding of insurance as a savings and investment mechanism."
The survey revealed that many South Africans saw death in the family, funeral expenses and loss of the main income earner as a main threat to their livelihoods or income.
FinScope said that in terms of livelihood drivers of financial inclusion, the survey indicated that financial literacy was vital.
"Those served informally have a negative perception about informal services and those who are financially excluded lack support and the capacity to work - they also generally have a negative outlook on life."
The most significant predictors of formal financial inclusion identified in the latest survey included financial literacy, the ability to save money, access to facilities such as water, sanitation and electricity as well as the position held within the household.
The survey concluded that there were three key interventions possible to increase financial inclusion in SA in a sustainable way.
These included building capacity through financial literacy programmes where it was lacking, providing financial products, services or mechanisms that served a specific need and removing barriers, in particular, regulatory barriers to create a conducive and enabling environment for financial inclusion.
http://www.businesslive.co.za/
While 73% of adults were financially included - meaning they used financial products from the formal or informal sectors, 68% used formal financial products - mainly from banks.
However, the survey concluded that there had been a decrease in the informally served market, leading to a rise in the number of South Africans that were financially excluded and who kept money in a safe place at home.
According to the survey, 27% of South African adults (just over nine million) were financially excluded in 2011, up from 23.4% (almost eight million) in 2010.
The survey also found that Mzansi account awareness and usage had decreased from last year.
"This raises an important question that needs to be understood further and that is: Are banks substituting Mzansi accounts with in-house entry level banking products or are Mzansi accounts becoming dormant?"
FinScope said this was "significant" especially since the Financial Sector Charter required the banking sector to make banking more accessible to South Africans.
It was found that 36% of individuals had never heard of the account before and those who used it, often indicated that it was their first account.
The majority of individuals who had not heard of Mzansi fell within the LSM [living standards measure] four to six range.
"This particular market is concerned with fees, and trust in a product, and in financial institutions will impact decision-making.
"Furthermore, the research indicates that banks seem to be encouraging their clients less to take up Mzansi accounts than in 2010. It is also often the case that the banks will persuade clients not to open this account."
The survey also found that 57% of the adult population in the country did not have any form of insurance in 2011 compared to 50% in 2010.
The percentage of South African adults making use of formal insurance products also dropped from 40% in 2010 to 34% in 2011.
"Perceptions of insurance products are generally quite positive and they are mainly associated with protection from risk, safety and reliability.
"On a functional level, insurance seems to be more likely to be associated with funeral cover, followed by an understanding of insurance as a savings and investment mechanism."
The survey revealed that many South Africans saw death in the family, funeral expenses and loss of the main income earner as a main threat to their livelihoods or income.
FinScope said that in terms of livelihood drivers of financial inclusion, the survey indicated that financial literacy was vital.
"Those served informally have a negative perception about informal services and those who are financially excluded lack support and the capacity to work - they also generally have a negative outlook on life."
The most significant predictors of formal financial inclusion identified in the latest survey included financial literacy, the ability to save money, access to facilities such as water, sanitation and electricity as well as the position held within the household.
The survey concluded that there were three key interventions possible to increase financial inclusion in SA in a sustainable way.
These included building capacity through financial literacy programmes where it was lacking, providing financial products, services or mechanisms that served a specific need and removing barriers, in particular, regulatory barriers to create a conducive and enabling environment for financial inclusion.
http://www.businesslive.co.za/
Monday 05 December 2011
Savvy petrol shopping for cheaper holiday
December 4 2011 at 12:25pm
By Angelique Arde
In light of the recent hikes in the petrol price, is it possible to offset this cost – or at least some of it – by becoming a more savvy petrol shopper?
In addition to cash, petrol cards, debit cards and cheque cards, increasingly petrol stations now also accept credit cards. Whichever method you use to pay for petrol, it’s costing you – be it card fees, transaction fees and/or interest.
So what is the most cost-effective way to pay for petrol? As always, it depends on your circumstances: the type of account you have and your banking habits.
As of November 2, the most recent increase, petrol costs you an additional 23 cents a litre and diesel an extra 36 cents a litre. Assuming your tank takes 45 litres of petrol, it now costs you about R477, or R10.35 more, to fill up inland. Ninety-three octane costs R10.60 a litre inland and 95 octane petrol sells for R10.47 a litre at the coast. The wholesale price of diesel with a sulphur content of 0.05 percent is R9.81 at the coast and R10.01 inland, but the retail price of diesel varies among filling stations.
The advantages and disadvantages of the various ways of paying for petrol are discussed below.
CASH
Cash is king, or so the saying goes. But is it really? Not always. Withdrawing R500 from your bank’s ATM can cost you R9 if you bank with Absa and have a standard current account. It will cost you even more if you withdraw the cash from another bank’s ATM.
Depending on where you bank, you may be able to escape cash withdrawal charges altogether if you maintain a minimum monthly balance of R10 000 in your account. On some accounts, maintaining a certain minimum balance entitles you to either unlimited or a limited number of free transactions a month. However, these accounts earn little or no interest.
Certain accounts, such as Absa’s Platinum current account, have unlimited free transactions of a certain type in return for a fixed monthly fee. Other accounts, such as Standard Bank’s Prestige account, offer a limited number of free transactions a month.
The Platinum and the Prestige accounts are aimed at clients with an income of at least R25 000 a month. Professionals with certain degrees and who earn at least R5 000 a month also qualify for a Prestige account at Standard Bank.
Absa’s Platinum account costs R180 a month and Standard Bank’s Prestige account costs you R209 on the fixed monthly fee option.
Alternatively, Prestige clients can go for the pay-as-you-transact option, which has a minimum monthly fee of R85.
If your transaction charges are less than R85 a month, the bank still charges you R85 a month. If your transaction costs add up to more than R85 a month, you pay for each transaction after you’ve spent R85.
With the fixed monthly fee option, Prestige clients receive, among other things, 12 cash withdrawals from a Standard Bank ATM. Once you exceed your 12 withdrawals, it’ll cost you R3.90 plus 1.17 percent of the value of your transaction each time you draw cash from a Standard Bank ATM. So it will cost you R9.75 to draw R500. It costs you even more if you draw from another bank’s ATM.
Standard Bank clients with Prestige, Elite, Achiever or Achiever Go accounts would pay a whopping R16.45 for a R500 withdrawal from another bank’s ATM.
Drawing from your own bank’s ATMs and drawing large sums of cash less frequently may enable you to save on cash withdrawal fees. If you don’t know what you’re paying in cash withdrawal fees, make a point of finding out.
CREDIT CARDS
Since July 2009, when regulations were changed to allow retailers to accept credit cards for fuel purchases, the major fuel retailers have been phasing in facilities to enable customers to pay with plastic in all its forms. Apart from the convenience to the customer, petrol stations want to minimise their exposure to crime by handling as little cash as possible.
Of the 1 100 Engen stations countrywide, about 600 accept credit cards and most accept debit cards, Pierr Roodt, the retail marketing manager at Engen, says.
The acceptance of cards is at the discretion of the individual who owns the garage, Roodt says.
More than half of all fuel sold by Engen is paid for by cards, he says.
Caltex, which has about 800 stations nationwide, accepts debit cards at “90 percent of service stations” and all forms of card payment at selected stations, Teresa Booth-Oliveira, the general manager of products at Chevron, says.
Shell has almost 700 stations around South Africa, of which 450 take all cards and the rest take debit cards, Vuyiswa Mamputa, the local brand and marketing implementer for Shell, says.
But is it a good idea to buy fuel on credit? That depends on how disciplined you are at managing your credit card.
A credit card can be the most cost-effective method of payment, because there are no transaction costs. There are annual fees, but these are sometimes included in a bundled account.
Remember that when you pay with a credit card, you’re using the bank’s money and not your own. The bank lends that money to you interest-free for between 25 and 50-odd days. But after that grace period is up, the interest rate is typically very steep.
To save yourself interest, be sure to pay off your credit card in full before the interest-free period expires. If you don’t, you can easily be caught in a debt trap.
In an article entitled “Managing your debt” on Standard Bank’s website, the bank says it is wise to use credit only to buy assets, and if you have to use credit to buy consumables – such as petrol or food – you should pay it off as soon as possible.
“One of the golden rules of good money management is to ensure that you are not paying for something you no longer have or use,” Standard Bank advises.
What does it cost you to buy petrol on your credit card?
At Absa, First National Bank, Nedbank and Standard Bank, the transaction itself costs you nothing. The big four banks regard fuel purchased on a credit card as a regular retail purchase, so you benefit from the usual interest-free period set by your bank. But once the interest-free period is up, you pay interest at the rate that your bank charges you.
Your interest rate will be determined by your credit profile and the type of credit card you have. Credit card interest ranges from nine to 21.1 percent a month.
On most credit cards, the interest rate is about 17 percent, which is hefty considering that the prime rate is only nine percent. Only clients who qualify for credit cards at the top end of the market pay interest of nine percent.
Capitec does not yet offer a credit card. The bank plans to launch one in the new year.
DEBIT/CHEQUE CARDS
Safety and convenience are the big selling points of a debit card. Carrying cash is dangerous and debit cards are the answer, but what does it cost you every time you swipe your card?
Capitec clients enjoy unlimited free debit card transactions.
The bank’s only account – the Global One account – comes with a debit card that attracts no transaction fees when the card is swiped.
Absa clients on the Platinum package get unlimited free debit card transactions, while those on bundled pricing options, such as the Silver and the Gold current account packages, enjoy limited free transactions, including debit card transactions.
Absa’s Mzansi clients pay a flat fee of R2 for every debit card transaction. And clients on Absa’s pay-as-you-go accounts pay R3.75 plus R0.75 per R100 or part of R100.
So, if it costs you R477 to fill your tank, it will cost you R7.50 to use your Absa debit card if you’re on the pay-as-you-go option.
Nedbank clients with bundled accounts, such as the Savvy Electronic or the Everyday current account, have unlimited debit card purchases included in their monthly fee.
Nedbank clients with current accounts and who are on the pay-as-you-use payment option pay R3.65 for debit card transactions, while Transactor Plus or Savings Deposit account holders pay R2.25 for debit card transactions.
For clients on Nedbank’s Ke Yona account, debit card transactions cost a flat fee of R1.
Standard Bank’s debit card charges also differ according to the underlying account. For example, clients who pay a fixed monthly fee on some current accounts don’t pay to swipe their debit or cheque cards. But clients who are on the pay-as-you-transact option pay R3.75 plus 0.75 percent of the value of the transaction, with a maximum fee of R17.
First National Bank clients can use a cheque card to pay for petrol and incur no additional charges – unless you have a petrol card linked to your cheque account, in which case you pay R3.90 per transaction. Transactions with an Electron debit card cost R2.75 for clients on the pay-as-you-use option, but are included for those on the unlimited option.
In a recent survey on bank charges, the Solidarity Research Institute notes a distinction between debit and cheque cards, which function much like credit cards and allow for online purchases.
The institute says cheque cards and debit cards typically incur the same transaction fees, but it’s more expensive to replace a cheque card than it is a debit card.
TILLPOINTS
Remember that you can also draw cash from tillpoints at retailers. If you’re a Capitec client, it’s cheaper to draw cash from a tillpoint than from the bank’s ATMs.
Capitec charges its clients a flat fee of R1 to draw cash from Shoprite, Checkers, Pep, Pick n Pay and Boxer stores. (You have to make a purchase in order to draw cash at Shoprite, Checkers and Pep.)
First National Bank (FNB) clients who pay a fixed monthly fee for transactions can make an unlimited number of tillpoint withdrawals at no additional cost. FNB clients with Easy Plan, Smart or Personal accounts and who are on the pay-as-you-use option pay a flat fee of R0.90 irrespective of the amount withdrawn.
At Absa, clients with packages (what the banks call bundled options) can draw cash from tillpoints at no cost, until the number of bundled transactions is exhausted.
Depending on the bank, a package can include access to an overdraft facility and a credit card. Packages are offered to clients who are middle- to high-income earners.
Absa clients who have pre-paid debit cards can withdraw cash from tillpoints for free. But Absa’s Mzansi clients pay a flat fee of R4.75 to draw cash from a tillpoint. The Mzansi account is a transactional bank account aimed at people with a low income.
Standard Bank’s Mzansi clients pay R3.50 for cash withdrawals at tillpoints, while Eplan clients pay R5. Clients with a current account on the pay-as-you-transact option pay R3.75 plus 0.75 percent of the transaction, up to R17. Standard Bank’s clients with current accounts on the bundled option don’t pay for tillpoint withdrawals.
For clients with Nedbank’s Ke Yona account, drawing cash from Pick n Pay and Boxer stores costs a flat fee of R1.
Nedbank clients with current accounts and who are on the pay-as-you-use payment option pay R3.65 for cash withdrawals at tillpoints. The bank’s clients who don’t have current accounts but who have the pay-as-you-use payment option pay R2.25 for cash withdrawals at tillpoints.
GARAGE CARDS
Trade union Solidarity’s Research Institute chose not to include garage cards in a recent survey on bank charges, because they’ve become largely redundant. “Most filling stations, if not all of them, now also accept payment by debit and credit cards, which makes a petrol card unnecessary,” the report says.
Standard Bank says its garage card is still on offer because some fuel stations do not yet accept cheque and credit cards.
The bank charges an annual fee of R115 for a garage card and a flat fee of R3.85 for each transaction. For clients with a bundled pricing option, garage card fees are included in the bundle.
A Standard Bank garage card must be linked to a current account or a credit card. If it is linked to a current account, purchases made on the card are debited to the current account. If it is linked to a credit card, purchases made on the garage card are debited to your credit card – in other words, they are treated like any other debit on your credit card.
The same interest rate charged on your credit card applies to purchases made using a garage card that is linked to your credit card. So if you have a credit card with Standard Bank, it makes more sense for you to use your credit card. The only time a petrol card would be more useful is if the petrol station doesn’t accept credit cards.
The interest rate charged on a credit card differs from client to client, depending on the client’s profile.
If your Standard Bank garage card is linked to your credit card, your credit card limit applies. If it’s linked to your current account, there is no limit to the credit on your garage card, which can be used for all motor-related expenses.
Beware though: if you have an overdraft on your current account, and your account goes into overdraft, transactions associated with your garage card will be debited to your overdraft. The banks do not allow you to buy petrol on a budget facility.
A garage card from Absa can either function as a stand-alone card with its own account or be linked to your credit card. A stand-alone garage card functions separately, with its own limit, and is paid separately.
When linked to your credit card, the Absa garage card shares the same limit, and transactions are included in the minimum payment due. Absa charges R3.50 per garage card transaction.
Nedbank offers a garage card linked to a current account, as well as a garage credit card.
Petrol transactions on a garage card linked to a bundled product, such as the Everyday and the Savvy current accounts, are free.
Nedbank’s garage credit card incurs a monthly fee of R14.25 and a transaction cost of R3.65 per swipe.
First National Bank (FNB) offersa stand-alone petrol card at a cost of R275 a year. This annual fee includes membership of the Automobile Association. Every time you swipe the card to pay for petrol or other motor-related expenses, it costs you R3.90.
FNB also offers clients a petrol card that can be linked to a cheque account. If you are on the pay-as-you-use option, each time you swipe the card, it costs you R3.90. But if you’re on the unlimited option, these costs are included in the monthly fee. The card incurs a monthly fee of R10 (or R120 a year)
http://www.iol.co.za
By Angelique Arde
In light of the recent hikes in the petrol price, is it possible to offset this cost – or at least some of it – by becoming a more savvy petrol shopper?
In addition to cash, petrol cards, debit cards and cheque cards, increasingly petrol stations now also accept credit cards. Whichever method you use to pay for petrol, it’s costing you – be it card fees, transaction fees and/or interest.
So what is the most cost-effective way to pay for petrol? As always, it depends on your circumstances: the type of account you have and your banking habits.
As of November 2, the most recent increase, petrol costs you an additional 23 cents a litre and diesel an extra 36 cents a litre. Assuming your tank takes 45 litres of petrol, it now costs you about R477, or R10.35 more, to fill up inland. Ninety-three octane costs R10.60 a litre inland and 95 octane petrol sells for R10.47 a litre at the coast. The wholesale price of diesel with a sulphur content of 0.05 percent is R9.81 at the coast and R10.01 inland, but the retail price of diesel varies among filling stations.
The advantages and disadvantages of the various ways of paying for petrol are discussed below.
CASH
Cash is king, or so the saying goes. But is it really? Not always. Withdrawing R500 from your bank’s ATM can cost you R9 if you bank with Absa and have a standard current account. It will cost you even more if you withdraw the cash from another bank’s ATM.
Depending on where you bank, you may be able to escape cash withdrawal charges altogether if you maintain a minimum monthly balance of R10 000 in your account. On some accounts, maintaining a certain minimum balance entitles you to either unlimited or a limited number of free transactions a month. However, these accounts earn little or no interest.
Certain accounts, such as Absa’s Platinum current account, have unlimited free transactions of a certain type in return for a fixed monthly fee. Other accounts, such as Standard Bank’s Prestige account, offer a limited number of free transactions a month.
The Platinum and the Prestige accounts are aimed at clients with an income of at least R25 000 a month. Professionals with certain degrees and who earn at least R5 000 a month also qualify for a Prestige account at Standard Bank.
Absa’s Platinum account costs R180 a month and Standard Bank’s Prestige account costs you R209 on the fixed monthly fee option.
Alternatively, Prestige clients can go for the pay-as-you-transact option, which has a minimum monthly fee of R85.
If your transaction charges are less than R85 a month, the bank still charges you R85 a month. If your transaction costs add up to more than R85 a month, you pay for each transaction after you’ve spent R85.
With the fixed monthly fee option, Prestige clients receive, among other things, 12 cash withdrawals from a Standard Bank ATM. Once you exceed your 12 withdrawals, it’ll cost you R3.90 plus 1.17 percent of the value of your transaction each time you draw cash from a Standard Bank ATM. So it will cost you R9.75 to draw R500. It costs you even more if you draw from another bank’s ATM.
Standard Bank clients with Prestige, Elite, Achiever or Achiever Go accounts would pay a whopping R16.45 for a R500 withdrawal from another bank’s ATM.
Drawing from your own bank’s ATMs and drawing large sums of cash less frequently may enable you to save on cash withdrawal fees. If you don’t know what you’re paying in cash withdrawal fees, make a point of finding out.
CREDIT CARDS
Since July 2009, when regulations were changed to allow retailers to accept credit cards for fuel purchases, the major fuel retailers have been phasing in facilities to enable customers to pay with plastic in all its forms. Apart from the convenience to the customer, petrol stations want to minimise their exposure to crime by handling as little cash as possible.
Of the 1 100 Engen stations countrywide, about 600 accept credit cards and most accept debit cards, Pierr Roodt, the retail marketing manager at Engen, says.
The acceptance of cards is at the discretion of the individual who owns the garage, Roodt says.
More than half of all fuel sold by Engen is paid for by cards, he says.
Caltex, which has about 800 stations nationwide, accepts debit cards at “90 percent of service stations” and all forms of card payment at selected stations, Teresa Booth-Oliveira, the general manager of products at Chevron, says.
Shell has almost 700 stations around South Africa, of which 450 take all cards and the rest take debit cards, Vuyiswa Mamputa, the local brand and marketing implementer for Shell, says.
But is it a good idea to buy fuel on credit? That depends on how disciplined you are at managing your credit card.
A credit card can be the most cost-effective method of payment, because there are no transaction costs. There are annual fees, but these are sometimes included in a bundled account.
Remember that when you pay with a credit card, you’re using the bank’s money and not your own. The bank lends that money to you interest-free for between 25 and 50-odd days. But after that grace period is up, the interest rate is typically very steep.
To save yourself interest, be sure to pay off your credit card in full before the interest-free period expires. If you don’t, you can easily be caught in a debt trap.
In an article entitled “Managing your debt” on Standard Bank’s website, the bank says it is wise to use credit only to buy assets, and if you have to use credit to buy consumables – such as petrol or food – you should pay it off as soon as possible.
“One of the golden rules of good money management is to ensure that you are not paying for something you no longer have or use,” Standard Bank advises.
What does it cost you to buy petrol on your credit card?
At Absa, First National Bank, Nedbank and Standard Bank, the transaction itself costs you nothing. The big four banks regard fuel purchased on a credit card as a regular retail purchase, so you benefit from the usual interest-free period set by your bank. But once the interest-free period is up, you pay interest at the rate that your bank charges you.
Your interest rate will be determined by your credit profile and the type of credit card you have. Credit card interest ranges from nine to 21.1 percent a month.
On most credit cards, the interest rate is about 17 percent, which is hefty considering that the prime rate is only nine percent. Only clients who qualify for credit cards at the top end of the market pay interest of nine percent.
Capitec does not yet offer a credit card. The bank plans to launch one in the new year.
DEBIT/CHEQUE CARDS
Safety and convenience are the big selling points of a debit card. Carrying cash is dangerous and debit cards are the answer, but what does it cost you every time you swipe your card?
Capitec clients enjoy unlimited free debit card transactions.
The bank’s only account – the Global One account – comes with a debit card that attracts no transaction fees when the card is swiped.
Absa clients on the Platinum package get unlimited free debit card transactions, while those on bundled pricing options, such as the Silver and the Gold current account packages, enjoy limited free transactions, including debit card transactions.
Absa’s Mzansi clients pay a flat fee of R2 for every debit card transaction. And clients on Absa’s pay-as-you-go accounts pay R3.75 plus R0.75 per R100 or part of R100.
So, if it costs you R477 to fill your tank, it will cost you R7.50 to use your Absa debit card if you’re on the pay-as-you-go option.
Nedbank clients with bundled accounts, such as the Savvy Electronic or the Everyday current account, have unlimited debit card purchases included in their monthly fee.
Nedbank clients with current accounts and who are on the pay-as-you-use payment option pay R3.65 for debit card transactions, while Transactor Plus or Savings Deposit account holders pay R2.25 for debit card transactions.
For clients on Nedbank’s Ke Yona account, debit card transactions cost a flat fee of R1.
Standard Bank’s debit card charges also differ according to the underlying account. For example, clients who pay a fixed monthly fee on some current accounts don’t pay to swipe their debit or cheque cards. But clients who are on the pay-as-you-transact option pay R3.75 plus 0.75 percent of the value of the transaction, with a maximum fee of R17.
First National Bank clients can use a cheque card to pay for petrol and incur no additional charges – unless you have a petrol card linked to your cheque account, in which case you pay R3.90 per transaction. Transactions with an Electron debit card cost R2.75 for clients on the pay-as-you-use option, but are included for those on the unlimited option.
In a recent survey on bank charges, the Solidarity Research Institute notes a distinction between debit and cheque cards, which function much like credit cards and allow for online purchases.
The institute says cheque cards and debit cards typically incur the same transaction fees, but it’s more expensive to replace a cheque card than it is a debit card.
TILLPOINTS
Remember that you can also draw cash from tillpoints at retailers. If you’re a Capitec client, it’s cheaper to draw cash from a tillpoint than from the bank’s ATMs.
Capitec charges its clients a flat fee of R1 to draw cash from Shoprite, Checkers, Pep, Pick n Pay and Boxer stores. (You have to make a purchase in order to draw cash at Shoprite, Checkers and Pep.)
First National Bank (FNB) clients who pay a fixed monthly fee for transactions can make an unlimited number of tillpoint withdrawals at no additional cost. FNB clients with Easy Plan, Smart or Personal accounts and who are on the pay-as-you-use option pay a flat fee of R0.90 irrespective of the amount withdrawn.
At Absa, clients with packages (what the banks call bundled options) can draw cash from tillpoints at no cost, until the number of bundled transactions is exhausted.
Depending on the bank, a package can include access to an overdraft facility and a credit card. Packages are offered to clients who are middle- to high-income earners.
Absa clients who have pre-paid debit cards can withdraw cash from tillpoints for free. But Absa’s Mzansi clients pay a flat fee of R4.75 to draw cash from a tillpoint. The Mzansi account is a transactional bank account aimed at people with a low income.
Standard Bank’s Mzansi clients pay R3.50 for cash withdrawals at tillpoints, while Eplan clients pay R5. Clients with a current account on the pay-as-you-transact option pay R3.75 plus 0.75 percent of the transaction, up to R17. Standard Bank’s clients with current accounts on the bundled option don’t pay for tillpoint withdrawals.
For clients with Nedbank’s Ke Yona account, drawing cash from Pick n Pay and Boxer stores costs a flat fee of R1.
Nedbank clients with current accounts and who are on the pay-as-you-use payment option pay R3.65 for cash withdrawals at tillpoints. The bank’s clients who don’t have current accounts but who have the pay-as-you-use payment option pay R2.25 for cash withdrawals at tillpoints.
GARAGE CARDS
Trade union Solidarity’s Research Institute chose not to include garage cards in a recent survey on bank charges, because they’ve become largely redundant. “Most filling stations, if not all of them, now also accept payment by debit and credit cards, which makes a petrol card unnecessary,” the report says.
Standard Bank says its garage card is still on offer because some fuel stations do not yet accept cheque and credit cards.
The bank charges an annual fee of R115 for a garage card and a flat fee of R3.85 for each transaction. For clients with a bundled pricing option, garage card fees are included in the bundle.
A Standard Bank garage card must be linked to a current account or a credit card. If it is linked to a current account, purchases made on the card are debited to the current account. If it is linked to a credit card, purchases made on the garage card are debited to your credit card – in other words, they are treated like any other debit on your credit card.
The same interest rate charged on your credit card applies to purchases made using a garage card that is linked to your credit card. So if you have a credit card with Standard Bank, it makes more sense for you to use your credit card. The only time a petrol card would be more useful is if the petrol station doesn’t accept credit cards.
The interest rate charged on a credit card differs from client to client, depending on the client’s profile.
If your Standard Bank garage card is linked to your credit card, your credit card limit applies. If it’s linked to your current account, there is no limit to the credit on your garage card, which can be used for all motor-related expenses.
Beware though: if you have an overdraft on your current account, and your account goes into overdraft, transactions associated with your garage card will be debited to your overdraft. The banks do not allow you to buy petrol on a budget facility.
A garage card from Absa can either function as a stand-alone card with its own account or be linked to your credit card. A stand-alone garage card functions separately, with its own limit, and is paid separately.
When linked to your credit card, the Absa garage card shares the same limit, and transactions are included in the minimum payment due. Absa charges R3.50 per garage card transaction.
Nedbank offers a garage card linked to a current account, as well as a garage credit card.
Petrol transactions on a garage card linked to a bundled product, such as the Everyday and the Savvy current accounts, are free.
Nedbank’s garage credit card incurs a monthly fee of R14.25 and a transaction cost of R3.65 per swipe.
First National Bank (FNB) offersa stand-alone petrol card at a cost of R275 a year. This annual fee includes membership of the Automobile Association. Every time you swipe the card to pay for petrol or other motor-related expenses, it costs you R3.90.
FNB also offers clients a petrol card that can be linked to a cheque account. If you are on the pay-as-you-use option, each time you swipe the card, it costs you R3.90. But if you’re on the unlimited option, these costs are included in the monthly fee. The card incurs a monthly fee of R10 (or R120 a year)
http://www.iol.co.za
Friday 02 December 2011
Nedbank Group named South African Bank of the Year for 2011
1 December 2011
The Banker magazine, a leading global banking publication, has named Nedbank Group as the South African Bank of the Year for 2011 at a gala function in London on 30 November 2011. This prestigious award recognises excellence in banking across the globe.
The Banker noted that "the trust that clients have shown in Nedbank Group through the recent financial crisis contributed to the recognition of being named ‘South African Bank of the Year 2011’ and is also testimony to Nedbank Group’s strong management, sound business model and prudent risk approach". The award is even more noteworthy given the fact that South Africa was rated second in the world in terms of "soundness of banks" in the recent World Economic Forum’s Global Competitiveness Report.
Nedbank Group’s Chief Executive, Mike Brown, said: "At Nedbank we pride ourselves on being a world-class financial organisation that always strives to be admired by our staff, clients, shareholders, regulators and the communities in which we operate. We are deeply honoured by this award, but at the same time recognise that we are on a journey and more still has to be done to achieve our vision of building Africa’s most admired bank.
"The award is testimony to the hard work of all the Nedbank Group staff over the past few years. We have been building on our strengths in our wholesale businesses, growing our wealth business and repositioning our retail business to become more client-centric. To this end we have launched various innovative new products such as Ke Yona, Savvy and Mpesa to focus particularly on the youth and entry level markets; we are expanding our branch footprint and ATM network; extending our branch hours to make banking more convenient for our clients, kept price increases below inflation over an extended period; and improved our risk practices within our retail areas. The outcome, as reflected in the group’s interim results to 30 June 2011, is strong growth in non-interest revenue thereby unlocking value for our shareholders, while continuing to build strong capital and liquidity positions with core Tier one capital of around 11%.
Nedbank Group is increasingly becoming a great place to work, a great place to bank and a great place to invest.
www.nedbank.co.za
The Banker magazine, a leading global banking publication, has named Nedbank Group as the South African Bank of the Year for 2011 at a gala function in London on 30 November 2011. This prestigious award recognises excellence in banking across the globe.
The Banker noted that "the trust that clients have shown in Nedbank Group through the recent financial crisis contributed to the recognition of being named ‘South African Bank of the Year 2011’ and is also testimony to Nedbank Group’s strong management, sound business model and prudent risk approach". The award is even more noteworthy given the fact that South Africa was rated second in the world in terms of "soundness of banks" in the recent World Economic Forum’s Global Competitiveness Report.
Nedbank Group’s Chief Executive, Mike Brown, said: "At Nedbank we pride ourselves on being a world-class financial organisation that always strives to be admired by our staff, clients, shareholders, regulators and the communities in which we operate. We are deeply honoured by this award, but at the same time recognise that we are on a journey and more still has to be done to achieve our vision of building Africa’s most admired bank.
"The award is testimony to the hard work of all the Nedbank Group staff over the past few years. We have been building on our strengths in our wholesale businesses, growing our wealth business and repositioning our retail business to become more client-centric. To this end we have launched various innovative new products such as Ke Yona, Savvy and Mpesa to focus particularly on the youth and entry level markets; we are expanding our branch footprint and ATM network; extending our branch hours to make banking more convenient for our clients, kept price increases below inflation over an extended period; and improved our risk practices within our retail areas. The outcome, as reflected in the group’s interim results to 30 June 2011, is strong growth in non-interest revenue thereby unlocking value for our shareholders, while continuing to build strong capital and liquidity positions with core Tier one capital of around 11%.
Nedbank Group is increasingly becoming a great place to work, a great place to bank and a great place to invest.
www.nedbank.co.za
FNB launches online insurance
FNB has launched wholesale online life cover direct to its customers for up to 50% cheaper than market related equivalent products.
The offering includes life, disability, critical illness and retrenchment cover, with no pre-exclusions on death on life cover.
Critical illness cover includes heart attack, stroke, cancer, and open heart surgery, among other conditions.
"Life cover and its related offerings are one of the highest priorities in the minds of South African parents. We need only look at the enormous popularity of stokvels offering funeral cover to see how important this is. The fact that there is such a wide insurance gap only indicates that affordability excludes large numbers. By offering cover at wholesale prices, I believe we can bring about a wide-spread improvement in the financial stability of families," FNB CEO Michael Jordaan said at the launch on Wednesday.
"To ensure that our customers are getting the best possible value for money, we have stripped out all unnecessary distribution costs, such as advertising and broker fees, enabling us to pass the saving on to our customers," added Johan Nagel, CEO of FNB Insurance.
Only 3.8 million out of a potential 12.4 million South African income earners are currently insured for life cover.
http://business.iafrica.com
The offering includes life, disability, critical illness and retrenchment cover, with no pre-exclusions on death on life cover.
Critical illness cover includes heart attack, stroke, cancer, and open heart surgery, among other conditions.
"Life cover and its related offerings are one of the highest priorities in the minds of South African parents. We need only look at the enormous popularity of stokvels offering funeral cover to see how important this is. The fact that there is such a wide insurance gap only indicates that affordability excludes large numbers. By offering cover at wholesale prices, I believe we can bring about a wide-spread improvement in the financial stability of families," FNB CEO Michael Jordaan said at the launch on Wednesday.
"To ensure that our customers are getting the best possible value for money, we have stripped out all unnecessary distribution costs, such as advertising and broker fees, enabling us to pass the saving on to our customers," added Johan Nagel, CEO of FNB Insurance.
Only 3.8 million out of a potential 12.4 million South African income earners are currently insured for life cover.
http://business.iafrica.com
Thursday 01 December 2011
FNB takes on life insurance industry
No stranger to innovation and never afraid to test uncharted waters, First National Bank (FNB) is now rattling the cage of the life insurance industry.
The bank has launched wholesale online life cover direct to its customers for up to 50% cheaper than market related equivalent products.
The offering includes life, disability, critical illness and retrenchment cover, with no pre-exclusions on death on life cover.
Critical illness cover includes heart attack, stroke, cancer, and open heart surgery, among other conditions.
"Life cover and its related offerings are one of the highest priorities in the minds of South African parents. We need only look at the enormous popularity of stokvels offering funeral cover to see how important this is. The fact that there is such a wide insurance gap only indicates that affordability excludes large numbers. By offering cover at wholesale prices, I believe we can bring about a wide-spread improvement in the financial stability of families," FNB CEO Michael Jordaan said at the launch on Wednesday.
On average, South Africans spend 4% of their after tax income on life insurance, equating to approximately R4.4 billion per annum. "We are able to strip out the unnecessary costs resulting in up to 50% less on life cover premiums, potentially saving South African consumers up to R2 billion in premiums per annum," said Jordaan.
"To ensure that our customers are getting the best possible value for money, we have stripped out all unnecessary distribution costs, such as advertising and broker fees, enabling us to pass the saving on to our customers," added Johan Nagel, CEO of FNB Insurance.
Asked whether FNB was changing its line of business, Jordaan responded: "Our primary business remains banking, but we also want to enrich our clients. We want to give wholesale insurance direct to the public. It's a value add product.
"We're not trying to make money out of this. It's just another reason for people to bank with FNB, But obviously we have to cover our costs.
Any FNB client who is a South African citizen, between 18 and 60, who holds an FNB credit, cheque or home loan account, may qualify for the FNB Life Cover policy. FNB has done away with the need to complete application forms. Instead customer will only need to complete a telephonic application and answer a few medical questions, to be accepted for cover. Applications are approved within 24 hours.
"This process allows us to give customers a premium that is as affordable as possible and, it protects them from unfairly subsidising people with higher risk profiles," said Nagel.
"Our integrated system means that we have access to our customer's profiles, simplifying the process and ensuring that customers do not have to transfer funds from one place to another in times of payment," he added.
Life cover is seen as a national priority, with only 3.8 million out of a potential 12.4 million South African income earners currently insured for life cover - and some 62% of those insured are under-insured.
"We have done our best to address this need and add value to our customers, creating a product that is simple, hassle-free and affordable," Nagel concluded.
http://www.businesslive.co.za
The bank has launched wholesale online life cover direct to its customers for up to 50% cheaper than market related equivalent products.
The offering includes life, disability, critical illness and retrenchment cover, with no pre-exclusions on death on life cover.
Critical illness cover includes heart attack, stroke, cancer, and open heart surgery, among other conditions.
"Life cover and its related offerings are one of the highest priorities in the minds of South African parents. We need only look at the enormous popularity of stokvels offering funeral cover to see how important this is. The fact that there is such a wide insurance gap only indicates that affordability excludes large numbers. By offering cover at wholesale prices, I believe we can bring about a wide-spread improvement in the financial stability of families," FNB CEO Michael Jordaan said at the launch on Wednesday.
On average, South Africans spend 4% of their after tax income on life insurance, equating to approximately R4.4 billion per annum. "We are able to strip out the unnecessary costs resulting in up to 50% less on life cover premiums, potentially saving South African consumers up to R2 billion in premiums per annum," said Jordaan.
"To ensure that our customers are getting the best possible value for money, we have stripped out all unnecessary distribution costs, such as advertising and broker fees, enabling us to pass the saving on to our customers," added Johan Nagel, CEO of FNB Insurance.
Asked whether FNB was changing its line of business, Jordaan responded: "Our primary business remains banking, but we also want to enrich our clients. We want to give wholesale insurance direct to the public. It's a value add product.
"We're not trying to make money out of this. It's just another reason for people to bank with FNB, But obviously we have to cover our costs.
Any FNB client who is a South African citizen, between 18 and 60, who holds an FNB credit, cheque or home loan account, may qualify for the FNB Life Cover policy. FNB has done away with the need to complete application forms. Instead customer will only need to complete a telephonic application and answer a few medical questions, to be accepted for cover. Applications are approved within 24 hours.
"This process allows us to give customers a premium that is as affordable as possible and, it protects them from unfairly subsidising people with higher risk profiles," said Nagel.
"Our integrated system means that we have access to our customer's profiles, simplifying the process and ensuring that customers do not have to transfer funds from one place to another in times of payment," he added.
Life cover is seen as a national priority, with only 3.8 million out of a potential 12.4 million South African income earners currently insured for life cover - and some 62% of those insured are under-insured.
"We have done our best to address this need and add value to our customers, creating a product that is simple, hassle-free and affordable," Nagel concluded.
http://www.businesslive.co.za
Capitec Can Help Businesses Too
http://www.cbn.co.za/dailynews/5901.html
1 December 2011
WHILE Stellenbosch-based Capitec Bank does not offer business banking for close corporations, companies, partnerships or trusts, it does offer a range of services to help companies save money and improve productivity.
Its point-of-sale payment solution is ideal for traders, retailers and wholesalers, and supports both restaurant and retail terminal software applications. It offers a competitive fee structure and one can keep your existing banking relationships. Merchant terminals are available as either a portable or desktop unit, and accept all debit, credit, chip and charge cards (American Express/Diners Club International if you are registered with them) so customers have more payment options.
The bank’s secure and convenient web-based salary transfer facility allows one to make cost-effective salary transfers and bulk payments at the lowest transaction fees, any time or place. There’s no monthly subscription, special software, call-out fees or hidden costs, and you can keep your existing banking relationships. Paying employees electronically is also safer than drawing cash at an ATM, Capitec says.
Employees who are under financial stress are typically the least productive because they are anxious and unfocused. Equipping your employees with basic financial skills will empower them to take control of their finances and become more productive with a newfound sense of financial wellbeing. Capitec’s financial skills presentation for employees, community groups and schools was developed in recognition of the fact that basic skills are the foundation for financial independence. The presentation is free of charge and supports national initiatives such as the National Skills Development Strategy.
Most employees are simply unable to visit a bank during the week, citing tight production schedules and lack of transport as some of the factors. Fortunately, Capitec can now bring the bank to them so they can open bank accounts onsite. This service is offered free of charge and helps reduce absenteeism, which maintains overall productivity. Global One is a single solution to money management that offers transparent banking with lower bank costs and fixed fees per transaction, and employees simply cannot afford to miss out, the bank argues.
1 December 2011
WHILE Stellenbosch-based Capitec Bank does not offer business banking for close corporations, companies, partnerships or trusts, it does offer a range of services to help companies save money and improve productivity.
Its point-of-sale payment solution is ideal for traders, retailers and wholesalers, and supports both restaurant and retail terminal software applications. It offers a competitive fee structure and one can keep your existing banking relationships. Merchant terminals are available as either a portable or desktop unit, and accept all debit, credit, chip and charge cards (American Express/Diners Club International if you are registered with them) so customers have more payment options.
The bank’s secure and convenient web-based salary transfer facility allows one to make cost-effective salary transfers and bulk payments at the lowest transaction fees, any time or place. There’s no monthly subscription, special software, call-out fees or hidden costs, and you can keep your existing banking relationships. Paying employees electronically is also safer than drawing cash at an ATM, Capitec says.
Employees who are under financial stress are typically the least productive because they are anxious and unfocused. Equipping your employees with basic financial skills will empower them to take control of their finances and become more productive with a newfound sense of financial wellbeing. Capitec’s financial skills presentation for employees, community groups and schools was developed in recognition of the fact that basic skills are the foundation for financial independence. The presentation is free of charge and supports national initiatives such as the National Skills Development Strategy.
Most employees are simply unable to visit a bank during the week, citing tight production schedules and lack of transport as some of the factors. Fortunately, Capitec can now bring the bank to them so they can open bank accounts onsite. This service is offered free of charge and helps reduce absenteeism, which maintains overall productivity. Global One is a single solution to money management that offers transparent banking with lower bank costs and fixed fees per transaction, and employees simply cannot afford to miss out, the bank argues.
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