New banks on the block

New Banks On The Block

Despite the country having 41 banks at the time of writing - Absa, FNB, Nedbank, and Standard Bank (known as ‘The Big Four’) dominate the local banking sector.

Together they provide over 90% of South African mortgages and more than 80% of banking services.

This makes it hard for new banks to disrupt the market, even though we have a massively underserved populace of lower-income households.

Quick Link References

• Postbank
• Mzansi Account
• How Does Postbank Stack Up?
• Know Your Banks

Back to South Africa's Comprehensive Bank Fees Guide

What is the ‘unbanked’ market?

People who don’t have access to or don’t use traditional banking services, such as a savings or current account, are referred to as the ‘unbanked’ market.

This market often relies on alternative financial services like cash transactions, payday loans, or mobile money instead of formal banking systems.

In South Africa, there are estimated to be about 6.5 million unbanked and 15 million underbanked individuals. Underbanked clients may have a bank account but lack access to credit, loans and savings groups.

According to Daily Investor , four new banks have registered this year and are set to enter the market – many of them aimed at the underserved/unbanked. Here’s a quick overview:

* Small, Medium, and Micro Enterprises, often in the informal sector.

Let’s take a closer look at the new kids on the block …

Postbank

The South African Post Office’s bank, Postbank, has been operating in South Africa for several years – providing minor banking services as a savings subsidiary.

This year, it launched as a fully-fledged bank that offers transactional accounts and other services. As South Africa’s only state-owned bank, Postbank is focused on low-cost banking services for unbanked and underserved clients.

Their Sassa Account, for instance, is designed specifically for people receiving social grants. It’s linked to a debit card and allows them to not only receive their grant payment but transact electronically anywhere where there’s a Visa or MasterCard logo.

If you need to make additional transactions, these are the costs:

Account Benefits:

• Free deposits, but only for Sassa-related EFT credits.
• No monthly service fees or minimum balance requirements.
• Up to three free purchases or cashback transactions at retail merchants per month; after that, there's a R3.50 fee per transaction.
• Limited free withdrawals, with a R5.31 fee plus a percentage on ATM withdrawals beyond the initial free monthly balance inquiry.
• One free replacement card per year, with R26 for subsequent replacements.

Mzansi Account

If you don’t receive a Sassa grant, you can get Postbank’s Mzansi Account. It’s linked to a debit card that allows users to make payments, withdraw cash from ATMs, and perform transactions at any Post Office branch nationwide.

A key feature is the ability to manage monthly expenses through debit and credit orders, but there are some limitations. The account balance must not exceed R25,000, and daily withdrawals are capped at R5,000.

* Mzansi Saswitch fees are only applicable if the ATMs of major banks are used: ABSA, FNB, Nedbank, Standard Bank, and Capitec. Fees will apply if any other bank ATM is used.

How does Postbank stack up?

So how does Postbank’s Sassa and Mzansi Card stack up against other players? Let’s take a look …

*PAYT = Pay as you transact
**Includes Vitality Savings and Money Account

The Verdict

Win! Like TymeBank and Bank Zero, Postbank’s Sassa account has no monthly admin fees. Their Mzansi account is also low-cost at R3 a month.

Win! Digital funds transfers are free and withdrawing cash at an ATM using Saswitch (Postbank doesn’t have its own ATMs) is reasonable at R5.31 + (amount withdrawn *0.83%) + R0.20 (switch fee) for the Sassa Card and R8.70 up to R100, thereafter an additional R2 per R100 and above on their Mzansi Card. This is cheaper than all the other accounts besides Discovery, which has a R25 a month admin fee.

Lose! When it comes to getting money from a point of sale (like a Checkers or PnP), Postbank is the most expensive of the banks at R3.50 for a cash back only and R2.45 for a purchase and cash on their Mzansi card.

💡Know Your Banks

South Africa has several types of banks, each serving different purposes. Here’s a quick look:

More Banking Guides and Tools