Absa has overhauled its pricing strategy in a bid to get its customers to do more transactions with it.
The group unveiled its fees for 2023 on Thursday.
The new pricing structure will come into effect on 1 January, and is built on offering more value to its ‘primary banked’ customers (those whose salaries get paid into Absa accounts) as well as account holders with high transaction frequency.
Read: New-look Absa still losing primary customers [Aug 2022]
Its basic banking Transact account’s monthly fee remains unchanged at R4.90, its ATM cash withdrawal fee increases from R8.00 per R1 000 to R10.00 per R1 000. There is no change to the R1.00 fee for digital payments and debit orders.
Monthly fees for the Flexi account increase R30.00 to R40.00. Debit card swipes and digital payments fees drop from R10.00 to R1.00, and external debit order fees go down from R10.00 to R3.50. Customers will also be able to withdraw at store till points at no fee, instead of R2.00.
Gold and Premium account holders will no longer pay an automatic fee of R2.30 per R100 for using the bank’s instant CashSend money transfer service.
These transactions will now fall within their monthly ‘free’ cash limits of R4 000 and R5 000 respectively, after which a standard fee (yet to be announced) will apply.
The monthly account fee goes up from R109 to R115 on Gold accounts, and from R190 to R200 on Premium accounts – the first time in three years these fees have been adjusted, the bank says.
Rationale
Christine Wu – Absa Everyday Banking managing executive for consumer product – tells Moneyweb the pricing adjustments were motivated by a “cost of living increase” and the various increases in interest rates.
She says the group has prioritised those who “are most vulnerable to the cost-of-living increase” and is hoping the environment is going to shift and the country will start to grow again.
Read:
Interest rates are up 325bps this year; how this affects your debt
Absa, Nedbank, Standard Bank 2022 fees compared [Dec 2021]
In addition to growing its retail banking customer numbers, Absa wants to deepen its relationships with these customers, acknowledging that the market is increasingly seeing multiple transactional account-holding consumers.
Wu says that instead of people simply taking up an account, the bank wants to ensure that customers use the account “and that we use that as a basis to deepen our relationship with customers”.
Absa Rewards
A notable change is that Absa is making its rewards programme free (members currently pay R23.20 per month to participate).
The programme is also in for some enhancements. These will be launched next year and include more attractive interest rates for VIP customers as well as benefits exclusive to users of the Absa banking app.
Wu says Absa is committed to being very competitive, but is also committed “to this principle of primacy”.
In short, it wants to be pre-eminent provider of banking and related services to its ‘primary banked’ customers.
“So that means the more you bank with us, the better value you get,” she says.
Read/watch: Sarb hikes interest rates to above pre-Covid levels