After keeping bundled pricing unchanged last year as a retail turnaround had only begun to take shape, Absa has hiked the bundled prices of its three mid-market accounts.
Premium Banking (previously called the Platinum Value Bundle) now costs R169 a month, a 6.3% increase on the R159 in 2017 and 2016. The Gold Value Bundle increases by 7.1% to R105 a month from R98 previously, while the Flexi Value Bundle costs 7.3% more at R59 (from R55). Fee changes, which come into effect on January 1 2018, were announced on Friday and detailed pricing is available here.
Rebates for keeping cash balances still apply (no longer the case with most other banks). On the Gold Value Bundle, a balance of more than R30 000 means a discount on 50% of your monthly fee (i.e. R52.50). On Premium, the threshold is more than R50 000 (also 50%, i.e. R84.50).
The bundled electronic transactions, debit orders and cash withdrawals (as well as deposits, where applicable) remain unchanged. Electronic transactions and fund transfers (including internal debit orders) are unlimited on all three bundles, with external debit orders/account payments limited to 11 per month on the Flexi Value Bundle and unlimited on the Gold Value Bundle and Premium Banking. Free cash withdrawals at Absa ATMs are limited to three, five and seven per month, respectively, and Gold Value Bundle and Premium Banking customers get five free cash deposits at Absa ATMs a month.
The trend of price increases on ‘out-of-bundle’ transactions – prevalent at all four full-service banking groups – continues, with Absa hiking these practically across the board. Airtime purchases on any of Absa’s channels regardless of whether you hold a bundled account or not now costs R1.50 (from R1.15), a 30% increase. Card replacement fees are now R140, from R125 in 2017 (and R120 in 2016), 12% higher.
The only real relief is on the penalty charged for a declined debit order due to insufficient funds. These used to be charged at R50 for the first three per year with the fee jumping to R150 thereafter. Now, they are flat-rated at R50 each on the Gold Value Bundle and Premium Banking accounts, while on the lower-end Flexi Account, these have been dropped to just R8.50. A declined transaction at any ATM or point-of-sale now attracts a R6 charge on all mid-market accounts, from R5.50 in 2017.
|Gold Value Bundle||Premium Banking (nee Platinum Value Bundle)|
|Electronic debits, balance enquiries, POS, cash at till||Unlimited||Unlimited||Unlimited||Unlimited|
|Cash withdrawal – Absa, Barclays ATM||5||5||7||7|
|Cash deposit – Absa ATM||5||5||5||5|
|Debit orders (external), account payments||Unlimited||Unlimited||Unlimited||Unlimited|
|Funds transfer, internal debit orders||Unlimited||Unlimited||Unlimited||Unlimited|
|Internet, app, cellphone banking||Free||Free||Free||Free|
|Pay-as-you-transact pricing (and for transactions over and above those included in bundled option)||2018||2017|
|Monthly admin fee (for those not on bundle)||R65 Premium / R45 Gold||R42 (legacy)|
|Cash withdrawal – Absa ATM||R4.50 + R1.40 per R100||R3.95 + R1.35 per R100|
|Cash withdrawal – POS||R4.50||R3.95|
|Cash withdrawal – Other ATM||R10.50 + R1.40 per R100||R9.95 + R1.35 per R100|
|Cash deposit – Absa ATM||R4.50 + R1.40 per R100||R3.95 + R1.35 per R100|
|Airtime purchase using Absa channels||R1.50||R1.15|
|Debit order (external)||R18||R16.95|
|Electronic account payment||R8.50||R7.50|
|Balance enquiry at Absa ATM||R1.75||R1.50|
|Monthly fee on overdrafts over R250||R68.40||R68.40|
|Declined debit order (insufficient funds)||R50||R50 for first 3 per year, thereafter R150|
|Declined POS/cash withdrawal (insufficient funds)||R6.00||R5.50|
Pricing for pay-as-you-transact banking has seen steep increases on both the lower and higher ends. The monthly administration fee for both accounts is up over 50% (reaching punitive territory) and is surely part of a deliberate strategy to shift customers to bundled pricing. And, given that per-transaction charges are up across the board, the appeal of these types of accounts is very limited and realistically only an option if one transacts very little.
|Monthly admin fee||2018||2017||Change|
Credit cards have also seen increases across the board, with an average jump of 20%. The monthly credit facility fee (charged separately and capped under the National Credit Act) remains R25. The jump between 2016 and 2018 on credit card fees is especially steep, with Premium up 25%, Gold up 40% and Transact (lower-end) up 140% in the period.
|Credit cards: monthly fee||2018||2017||2016|
|Premium (nee Platinum)||R50||R43||R40|
|Monthly Credit Facility Fee (for all accounts)||R25||R25||R25|
|Card replacement fee||R140||R125||R120|
These pricing moves come as Barclays Africa Group reported a decline of almost 300 000 customers with transactional accounts at its South African retail banking unit, Absa, between July 2016 and June 2017. As at June 30 2017, it had 5.96 million ‘transactional’ customers from 6.25 million a year ago, a decline of 4.9%. It said in August that this decline was “mainly driven by bank-initiated closures of dormant accounts in the entry-level segments”. However, it said customers in its ‘target’ segments grew, with Private Bank and Affluent (Premium Banking) customer numbers up by 4% and 12% respectively.
* Analyses of Standard Bank and Nedbank’s pricing changes will follow this week. FNB price changes are effective July 1 each year.
* Hilton Tarrant works at immedia. He can still be contacted at firstname.lastname@example.org.
Brought to you by Moneyweb