NEDBANK says it will forfeit about R67m a year in noninterest revenue by scrapping all noncash Automated Teller Machine (ATM) transaction fees, such as balance enquiries and prepaid purchases.
This is part of a strategy to retain and grow the bank’s customer base, as pricing is increasingly becoming a competition issue among the big four banks.
Nedbank has the smallest customer base of about 5.6-million and has been targeting the low-end market for growth.
Moira Sharp, product specialist manager pricing and analytics at Nedbank said on Friday the strategy was an acquisition strategy, but it had to be the right customer that was acquired.
As banks cut transactional fees for the benefit of the customers, it put pressure on them to enlarge their customer base and attract good quality transacting clients in order to offset the noninterest revenue lost from cutting fees.
Ms Sharp said for Nedbank’s Savvy Account, the bank was reducing the charges for transactions made in non-Nedbank ATMs, as the bank was out of market compared to others.
The new pricing structure is effective on January 1. Nedbank said it would reduce cash deposit fees on the account aimed at clients with higher transactions.
Ms Sharp said the bank was the first to introduce technology in South Africa that reduced successful online banking fraud attempts by more than 99%, thus saving the bank millions of rand.
Nedbank’s pricing announcement comes just two days after Standard Bank said it would not increase fees next year for a second year in a row.
"We note the recent reduction in monthly fees by some banks on certain bundled products and encourage our clients to review their transacting behaviour and not only the headline monthly fee," Anton de Wet, managing executive for client engagement at Nedbank said last Friday.