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The saying goes that there’s no such thing as a free lunch, so when FNB recently launched a digital account that includes no monthly fees; former CEO Michael Jordaan, who is behind a new digital banking start-up Bank Zero, was quick to point out that it is not totally free. Free banking is a bit like cashing in travellers cheques or changing foreign currency; it is advertised as no fees, but somewhere in that transaction you will be paying hidden fees as money charges that are ‘free’ will include their cut in the lower rate they offer you to change your rand into dollars. And this is what Jordaan is pointing out to his former bank that is taking on Bank Zero by using the ‘zero’ in its Easy Zero account, although FNB is denying that in this article on MyBroadband. With traditional banks threatened by digital disruptors; the old school players who are weighed down by unprofitable branches and practices will have to up their game as the disruptors are more agile and innovative, and it seems that FNB is telling Bank Zero that the game is on. – Linda van Tilburg
FNB Easy Zero and Bank Zero – The fight over “zero”
FNB recently launched its new Easy Zero account – a digital account with a bank card that allows customers to transact without paying a monthly fee.
The Easy Zero account is a rebrand of FNB’s eWallet eXtra offering, which now provides customers with a branded FNB bank card.
The Easy Zero card can be used for free swipes and offers “cost-effective” fees for transactions and ATM withdrawals.
Easy Zero customers will be able to purchase prepaid airtime and make free cash deposits up to the value of R1,500 per month.
Additionally, customers can monitor their account balance and transaction history on their mobile phone, and send money to any person with a valid South African cellphone number.
Easy Zero and Bank Zero
With a name like Easy Zero, it is not a stretch to imagine that FNB is taking aim at its former CEO Michael Jordaan’s new digital banking startup – Bank Zero.
What makes it even more felicitous is that FNB launched its Easy Zero account in the same week Bank Zero unveiled its new digital banking service.
Jordaan responded to FNB’s Easy Zero account on Twitter, saying “imitation is the best form of flattery”.
“We’re quite flattered that a competitor [FNB] would launch [Easy Zero] instead of Easy Tyme or Easy Discovery,” he said.
The former FNB CEO questioned a report calling FNB’s Easy Zero account a zero-fee account when just the monthly fee is zero. “What about EFTs and debit orders?” Jordaan asked.
Speaking to The Money Show, FNB Consumer CEO Christoph Nieuwoudt said the timing of their launch at the same time as Bank Zero is purely coincidental.
Nieuwoudt said they have been planning the Easy Zero account since March and decided on the name back then.
He said their new account is not aimed at the same banking market as Bank Zero and that their branding was the product of research about their target audience.
“The name really appeals to the target audience and has nothing to do with what someone else calls their bank,” he said.
Nieuwoudt dismissed criticism that the FNB Easy Zero account costs are not completely zero because of hidden costs and fees.
He said the typical transactions associated with this account – receiving e-wallet payments, depositing R1,500 cash at FNB ATMs and buying prepaid airtime and data – are all free.
He added that clients will receive their banking card for free and will not pay when they use the card.
“It is really a very, very low-cost account and you can open it within three minutes. We think it offers substantial value,” said Nieuwoudt.
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