Banking options for informal traders in SA
The Citizen compared business account offerings across four major banks.
SA’s major banks have banking options for informal traders. Image: iStock
Running a business can be time-consuming, so the last thing you want as an entrepreneur is dealing with the stress of managing your finances.
As self-employed entrepreneurs, informal traders are usually unregistered, often having no financial record-keeping systems in place.
Since keeping cash has become increasingly risky with criminals always ready to pounce, informal traders have become ‘easy’ targets, hence the need for secure banking options.
Fortunately, most financial institutions cater to informal traders, offering pocket-friendly banking services to safeguard their hard-earned money.
The Citizen compared banking options between Absa, First National Bank (FNB), Nedbank and Standard Bank.
The Business Evolve Lite account is Absa’s most ideal offering for informal traders, according to Ronnie Mbatsane, Managing Executive for SME Business at Absa Relationship Banking.
“It has no monthly fees and is suitable for all business segments and sectors,” he said, adding that opening the account was free of charge.
The bank also offers useful tools such as the Cash-Flow Manager integrated accounting tool, which provides real-time business analytics while allowing entrepreneurs to create online quotes and invoices, as well as access to a full payroll feature.
“Depending on their unique circumstances and the banking solutions chosen, clients may also have access to a host of other non-financial solutions, including business-focused training material and courses,” Mbatsane said.
FNB’s Business Zero account for sole proprietors with an annual turnover of up to R5 million has no monthly fees.
The account’s key features include unlimited free point-of-sale card swipes and multiple on-the-go card payment acceptance options like SpeedeeQR and SpeedeeApp, with no monthly rental fees charged.
Customers also have access to certain free FNB value-added services, including Fundaba (an entrepreneurial e-learning programme) and accounting, invoicing, cash flow and payroll software.
Opening a bank account is an excellent business move any entrepreneur can make.
“A bank account provides access to financial inclusion, to keep track of their income and expenses while building a financial profile, it gives [entrepreneurs] access to advice and technology, which is key to survival in the formal economy,” said Janis Robinson, Business Development Head at FNB Commercial Transaction Solution SME.
Nedbank has a StartUp Bundle account for novice entrepreneurs, charging no banking fees for the first six months. Thereafter, account holders are charged a monthly fee of R65, subject to terms and conditions.
The account package comes with a dedicated relationship banker, 20 free digital transactions and access to the bank’s digital channels.
“One of the key considerations we take into account is pricing, and we endeavour to ensure it is not a barrier to access into the economy by putting place affordable banking products with value-added features that will contribute to the success of their business,” said Mpendulo Matsebula, Head of ELB Strategy and CVP at Nedbank.
When it comes to business support, the bank’s SimplyBiz platform provides a space for clients to connect with other entrepreneurs, fostering collaborative potential.
“SimplyBiz also serves as a platform that shares tools and skills that enable businesses to grow, as well as steps on how they can access funding,” Matsebula explained.
The post-pandemic effects of Covid-19 are still evident in the economy long after lockdown restrictions have been lifted.
Nedbank noted that micro-entrepreneurs were among the most affected participants in the economy.
“Therefore, we have been intentional in ensuring that we aid them to rebuild and grow their business,” said Matsebula.
The MyMo Biz Account is Standard Bank’s primary offering for informal traders, charging a monthly fee of R5.
Cashless transactions are increasingly becoming the preferred payment method for many safety reasons, which requires traders to invest in speed-point machines to enable card payments.
Standard Bank provides traders with point-of-sale electronic devices at a once-off fee of R199, with no monthly charges.
Head of Enterprise Development for Business and Commercial Banking at Standard Bank, Naledzani Mosomane, said opening an account presented multiple benefits for informal traders.
- An account offers opportunities to expand the business by providing access to loans that can be used to buy fittings and equipment for the trading business.
- Enables traders to build a credit record, which could come in handy if you ever need a loan.
- Presents a convenient way to pay suppliers who will often not accept cash, despite requiring payment upon delivery.
- Enables traders to open accounts with suppliers, making it easier for them to obtain references and check financial behaviour through a credit bureau.
- An account offers access to other banking services, such as POS terminals.
“Having a bank account goes beyond saving, even if you are an informal trader. An account offers safety – there is no need to have cash in hand to pay for services,” said Mosomane.