South African bank copies Zimbabwean banks’ lite account model

South Africa has a new bank called Bank Zero. Its operating model will sound very familiar to Zimbabweans. The bank is targeting mainly those who are unbanked in the Southern African country by using a model that Zimbabwean banks such as Steward, FBC, BancABC and NMB, CABS and Agribank have perfected over the years.

It’s a cocktail of measures that include:

• Allowing people to sign up for an account through an App. BancABC, Steward and FBC already allow you to do this. The difference is that Bank Zero seems to be only allowing people to exclusively sign up through the app. That’s taking the model to an extreme but they have something that makes this process possible. South Africa has smart IDs thus making the process posssible and painless for them as they can hook up to the South African Home Affairs API to verify identities more easily.
• You can receive your debit card from the comfort of you own home once your account is approved. That’s so Branch X of them.
• They don’t charge monthly fees-tell me that doesn’t sound familiar
• The account allows you to buy prepaid airtime and data as well as electricity-we have been having that too.
• You can access banking services in supermarkets such as Pick n Pay, Checkers and Shoprite-again that’s a very Zimbabwean thing.
• You can do EFT payments with other normal accounts from big banks like FNB and Absa. EFT is like ZIPIT but better.

This is Africa

One of my favourite movies of all time is Blood Diamond starring Loearnado Dicaprio. Despite the stereotypes, caricatures, the slight condensation and the lite racism they got something right. In one of the scenes, they introduce the phrase TIA-This is Africa. This means what flies out there in the so-called Western or Eastern worlds sometimes doesn’t apply here. One such thing is banking.

A good part of Africa’s population is unbanked for one reason or another. Some do not have formal jobs and therefore don’t see the need. A lot of people don’t earn a regular or stable income so they would rather trust that little they have to their pillows. For some, it’s because they cannot meet the stringent KYC requirements put forth by banks and regulatory authorities.

That’s why Bank Zero’s strategy makes sense. It will probably not only allow them to lure a good part of the unbanked but it will also allow them to prey on their hapless competition that still continues with the old ways. Bank Zero even goes beyond what Zimbabwean banks do when it comes to targeting the unbanked:

• They are not charging for payments which are free
• Customers get free bank statements unlike here where banks make a good part of their profits by levying hefty fees for mundane services like checking your balance.
• Their cards support 3D secure and come with a chip. A lot of Zimbabawean banks are still issuing magnetic stripe cards in this day and age.
• You can temporarily disable your card from within the app. This is useful for when you know you are not using the card and someone tries to make use of it.
• The card/account allows you to make debit orders
• The account allows you to make online purchases too. It’s a MasterCard.
• You get charged R9 per R1000 for withdrawals that’s less than 1%

No Zimbabwean bank offers these in one service. If you want to make online payments for example you have to get a USD prepaid card. This is not a debit card for example and that can be an issue with some services that require a bona fide debit card. It would be nice if a Zimbabwean bank combined all these nifty features into one account.