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Latest low-fee, digital accounts shake up South African banking
By Onke Ngcuka
JOHANNESBURG, May 21 (Reuters) - South Africans were offered
low-fee, digital accounts by two "traditional" banks this week
in a sign of how competition from a new breed of cheaper,
online-only rivals is driving change in the $30 billion market.
Young, tech-savvy and cost-conscious South Africans are
being targeted by low-cost, digital-only newcomers such as
Discovery, ThymeBank and BankZero.
The new accounts from African Bank and Standard Bank
are the latest disruption to a market largely dominated
by four big players: Absa, FirstRand, Nedbank
and Standard Bank.
Both African Bank, a small lender which was rescued from
collapse just five years ago, and Standard Bank said customers
could open the new accounts without going into a branch.
African Bank said MyWorld was the cheapest account in South
Africa, while Standard Bank soft-launched its lowest-fee
account, dubbed MyMo, costing 4.95 rand per month and offering
clients free mobile data or air time for transactions.
African Bank Chief Executive Basani Maluleke said MyWorld,
which has accumulated 12,000 members since its soft launch in
mid-February, was a cutting-edge product and platform.
"Its innovative features provide a mechanism to share
banking in families, groups and in communities, which we believe
will draw a very positive response from customers," she said.
South Africa's big four are sensitive to disruption after
Capitec shot from an upstart to the country's fifth
biggest bank with a low-fee model.
They have since closed branches, improved digital offerings
and cut fees to ensure they can compete.
African Bank had focused on unsecured lending before its
near-collapse under the weight of bad debts led South Africa's
central bank to take a 50% stake.
(Reporting by Onke Ngcuka; Editing by Emma Rumney and Alexander
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