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Getting banked in minutes

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Last week, FNB announced the launch of eWallet eXtra, a mobile bank account that allows unbanked and underbanked South Africans to use a feature or smartphone to open a bank account, without the hassle of submitting paperwork at a branch.

This solution will be available by June.

This comes at a time where a number of rival banks such as Bank Zero, Discovery and TymeDigital, backed by billionaire Patrice Motsepe’s African Rainbow Capital, are waiting in the wings to make their debut in the industry, as reported in “The future of banking: Where will we go” (City Press, April 22 2018).

FNB’s eWallet eXtra is by no means a new concept. The bank already has an eWallet that enables customers to send and receive money.

Rivals Absa and Nedbank, respectively, have CashSend and Send-iMali, enabling people to transfer money instantly using mobile or internet banking.

With Absa’s offering, customers can collect money from any Absa ATM and they don’t need a bank account or card to withdraw it.

Nedbank’s version allows people to send cash anytime, anywhere without needing bank account details.

FNB’s eXtra product is not set to replace eWallet, but is in fact a separate product offering.

So what’s new?

It will have no monthly fees, which is set to put the cat among the pigeons when it comes to Old Mutual’s Money Account which charges R4.50 a month, and Capitec’s Global One Account which charges R5.80 a month.

What’s more, consumers are not required to submit any paperwork to open this account. They need only provide their name, surname and ID number on a mobile device.

“This is a simple, accessible and cost-effective solution,” says Gugu Zikhali, FNB head of transaction products: mass market.

“If you are above the age of 16 and own a cellphone, you’ll be able to get a mobile bank account with a unique account number in less than three minutes, and you don’t need a bank card to transact.

“eWallet eXtra will enable users to send or receive deposits from individuals and other banks, store funds for an unlimited period, pay accounts and also buy prepaid products like airtime, data and electricity. Users can also send money to other recipients and withdraw at any FNB ATM or at tills across participating Spar stores, which also allow for over-the-counter purchases,” said Zikhali.

This product is definitely not for those who want a fully functioning account with no spending limits. As it’s a basic account, one cannot have debit orders coming off. There are other restrictions too. The daily spend limit is R3 000 and R24 000 per month.

Like other online offerings, eWallet eXtra users will be able to view their bank account balance and transaction history.

Those who use an FNB Connect SIM will be able to access eWallet eXtra for free as they do not need airtime.

And there are safety features. The first layer of security on the product allows users to generate a PIN code to access their account.

Why target the unbanked?

Banks are always looking for new consumers and various reports over the years have shown that there are millions of people who don’t have bank accounts in South Africa.

FNB estimates that the figure is in excess of 11 million. Globally, it’s predicted that there are around 2 billion (mostly poor) people who don’t have bank accounts.

FNB wants to cater to this market before online providers and others keen to get into the banking sector, like Tyme, Bank Zero and retailers, snatch these potential clients from under their noses.

But they have had a few challenges to overcome, until now.

According to research from Boston Consulting, South Africans are not fans of the formal banking sector because of mistrust, high prices and lack of relevant services.

Financial institutions are starting to tackle this by offering products that are cheaper, as they bypass the need for call centres and over-the-counter interaction.

FNB believes the success of its latest offering will be its ability to address the gaps identified in its analysis of entry-level bank accounts and its eWallet remittance service.

FNB Easy CEO Pieter Woodhatch, points out that traditional bank accounts which carry monthly fees, and accept debit orders and restrict clients to using cards, do not meet the unique needs of irregular income earners such as seasonal workers.

“This is why we have integrated some eWallet functionality into the eWallet eXtra mobile bank account.”

He said that after they looked more carefully at what people were doing with eWallet, they realised that in excess of 1 million people were in effect using it as a bank account, despite the fact that it was designed as a remittance service.

Woodhatch said that digital adoption was the main solution to addressing the gaps in financial inclusion.

“Digital gives customers full access to their money and puts them in control,” he said.

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