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Pretoria - Competition among banks has increased and consumers choose a bank based on benefits, trade union Solidarity said on Tuesday.
"It might come down to the benefits for customers. The reward schemes on some accounts could be of great benefit to some clients," senior Solidarity researcher Paul Joubert said in Pretoria.
He was speaking at the release of research into charges for personal bank accounts by Absa [JSE:BAG], FNB, Standard Bank [JSE:SBK], Nedbank [JSE:NED], and Capitec [JSE:CPI].
He said the rewards included FNB's eBucks, Absa's Rewards, Standard Bank's uCount, and Nedbank's Greenbacks.
The research used four different profiles based on the number of transactions people would perform monthly.
"Low income and basic banking needs is where we see strong competition," he said.
Outweigh costs
Joubert said for the basic banking market both Absa and FNB were cheaper, but Capitec offered significant interest on any balance.
FNB's EasyAccount and Absa's Transact account were competing with Capitec.
For people in this market the cost margins were slim, he said.
"It might come down to which bank is closest," he said.
"There is strong competition on this level. Capitec isn't as far ahead as it has been."
He said for this market convenience could outweigh costs.
Capitec was leading the pack with lowest costs, but other banks had increased competition.
For the middle class costs had stagnated at around R100 per month and cost margins were small, Joubert said.
He said it was almost a surprise to see Nedbank on this level.
Bundle accounts
"They actually have the cheapest account [of the four biggest banks]," he said.
"Absa are improving quite a lot in terms of banking cost and they have brought their prices down."
Nedbank was the cheapest and Standard Bank the most expensive.
"If you are paying more than R120 [a month] you're probably paying too much," Joubert said.
He said banks were moving more towards bundle accounts and that pay-as-you-transact accounts were more expensive.
"It's not practical to have a pay-as-you-transact account anymore," Joubert said.
