Difference in bank charges smaller, loyalty bonuses now decisive
11 February 2021
Solidarity announced today with the release of its latest Bank Charges Report that banks in 2020 moved closer to one another with regard to their cost structures. Solidarity also found that there are now only very small differences between banks’ charges, with competition shifting to their rewards programmes.
“Banks have started to focus on their rewards programmes because it has become all but impossible to compete on costs. For this reason, we are focusing much more on rewards programmes this year, comparing them for the first time according to a fixed list of transactions,” explains Theuns du Buisson, economic researcher at the Solidarity Research Institute (SRI).
Solidarity explains that as soon as transactions increase, Capitec still is the cheapest by far if interest is not taken into account. For these consumers, however, costs are not the only consideration, according to Solidarity. For instance, Capitec does not offer any extra value such as an extensive rewards programme.
“What is clear in the new cost structures, in particular that of FNB, is that banks are trying to empower consumers as far as possible to do transactions by electronic means rather than visiting branches or ATMs. At present it is cheaper with all banks to withdraw cash at a store counter than even drawing it at your own bank’s ATM,” Du Buisson says.