The World Economic Forum recently highlighted an estimate that fewer than half of the 5.78 million SMEs in South Africa have a bank – largely because of high bank charges and transaction fees, though that is only one reason.
While some 85% of South Africans have a bank account – the highest banking penetration in Africa – many of these are used for cashing out social security grants rather than transactions.
Overall, there remains a lingering wariness of digital payments, which means many SMEs are largely dependent on cash.
That not only poses security concerns; the costs associated with moving physical cash into the banking system to pay suppliers are far higher.
To break these barriers, Capitec Business has introduced a more affordable banking solution for SA businesses with new pricing effective from 1 March 2024.
The bank has reduced its businesses banking pricing to a flat R50 monthly fee, with the same transaction fees that apply to its 21 million personal banking clients, regardless of the size or format of the business.
Capitec CEO Gerrie Fourie says one of the objectives of the new pricing structure for SMEs is to stimulate growth in SA, particularly considering the economic challenges outlined in the 2024 Budget Speech.
“We believe that by supporting SMEs to grow, they will create job opportunities to help our economy grow,” says Fourie.
“We understand the challenges businesses face through traditional banking. Traditional banks favour those who’ve made it. The largest, oldest and most successful businesses tend to get the best service, the most credit and often at the best price.
“That’s why we’re committed to providing simple, transparent, and affordable banking that could save them up to 50% in fees with no hidden costs. These savings can help SMEs manage their finances efficiently, invest in their growth, and create much-needed job opportunities.”
New fee structure
The new pricing regime, effective from 1 March, will save businesses up to 50% in normal fees:
- Free virtual card for online transactions
- Zero fees on local card payments
- R1 for payments and transfers to other Capitec accounts
- R2 for payments and transfers to other banks
- 50 per debit order
- 50 for immediate payments, and
- A low, fixed monthly fee of R50.
There’s also some relief for those SMEs transacting mainly in cash, with a R1.20 fee per R100 at cash-accepting ATMs.
Balance enquiries on Capitec accounts are free, and SMS notifications are charged at R0.35 each.
Fourie says it was always Capitec’s intention to disrupt business banking fees in much the same way it disrupted personal banking through its affordable, low-fee offering.
Extending the low-fee offering to businesses is a logical move, driven by direct client feedback.
“We took the time to understand the needs and preferences of our clients, and our findings were clear – they want a simple solution with a straightforward and cost-effective fee structure that is easy to understand and does not discriminate based on size,” adds Fourie.
“While our research indicated that businesses were ready to pay more, we decided to lead with value, and we reduced our fees significantly to be the most affordable full-service business banking solution in the market.”
The low-fee offering is part of a digital strategy through which the bank aims to deliver 80% of banking services online or via its app, but without losing the personal touch. To do this, it had to simplify the sign-up process and make it easier for businesses to transact online, whether they need forex, an overdraft, or asset finance.
Digital banking offering
The bank’s digital strategy is to bring more services online.
New clients can open a business bank account online or on the app in minutes, with no paperwork.
Thereafter, they, along with existing clients, will enjoy:
- Free access to digital banking through their app or the online portal;
- Personalised service and support through a relationship banker;
- Speedy approval of an overdraft or property or asset finance application;
- Forex services, rental finance solutions and payments services; and
- New generation touch-screen card machines delivered to the SME, with lower commission structures and free same-day settlements seven days a week.
“Capitec has evolved from a retail bank to a financial services company driven to help clients live better through the innovative use of technology and data,” says Fourie.
“We believe Capitec Business is a big milestone in this journey that will unlock phenomenal value for businesses, but we are not done yet as we continue to innovate and pioneer solutions to help our clients live better.”
Brought to you by Capitec Business Banking.
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