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Cardless cash withdrawals vs. card cash withdrawals

By Jessica Anne Wood

How do cardless cash withdrawal fees compare to the traditional card cash withdrawals at an ATM? In an attempt to answer this questions, Justmoney has compared the cost of making a cardless cash withdrawal to a standard cash withdrawal for several accounts from South Africa’s big four banks. (See table below)

The cost of a cardless cash withdrawals

For First National Bank (FNB) customers, the cost of a cardless cash withdrawal is the same regardless of which bank account you have. The fee is R1.85 per R100.

Jan Moganwa, chief executive of Customer Solutions at Absa, noted that the Absa Transact account has its own fee for cardless cash withdrawals, or cash send, at a flat fee of R7.99 per transaction. However, all other Absa accounts incur a fee of R7.90 + R1.30 per R100.

Nedbank offers cardless cash withdrawals, however, this falls under its Send iMali product. “Nedbank offers the Send - iMali product which allows Nedbank customers to transfer or send money to anyone that has a valid South African cell number including themselves. The money is available as cash instantly from any Nedbank ATM as a cardless withdrawal. This money send capability is available on all on all our digital channels,” explained Vanesha Palani, head of Transactional, Forex and Deposits at Nedbank.

The fees are the same for all Nedbank accounts, however, there are two pricing brackets. Withdrawals of R1 to R1000 have a flat fee of R10.50, and withdrawals of R1001to R2 500 incur a flat fee of R13.50.

Standard Bank offers a cardless cash withdrawal service called InstantMoney. Wendy Pienaar head of emerging payments at Standard Bank, explained: “It costs R9.95 to send an InstantMoney voucher. However, there are no charges for cashing out the money. The consumer needs to remember that there is a daily limit of R5000 and a monthly limit of R25 000.

Looking at these results, it is clear that the cost of making a cardless cash withdrawal (in most instances) does not vary according to the account you hold.

A comparison

From the table below, it would appear that Absa has the highest cardless cash withdrawal rate compared to the other banks. With regards to FNB and Nedbank, it will depend on how much a person is withdrawing as to who will be cheaper. For example, if you are only withdrawing a R100, FNB will be cheaper, but the higher the figure you are withdrawing the more expensive FNB becomes. If you withdraw R1,000, for example, it works out to a fee of R20,90 at FNB, but is R10,50 for Nedbank, making Nedbank the cheaper bank in this instance.

For Standard Bank, it costs a flat fee of R9.95 to send the InstantMoney voucher, but nothing to withdraw the cash from the ATM. These vouchers can be sent to non-Standard Bank customers as well. This is cheaper than Nedbank’s withdrawal rate, however, for FNB it will depend how much is being withdrawn whether or not Standard Bank or FNB is cheaper.

However, unlike the cost of a cardless cash withdrawal, the cost of using your card at the ATM does vary. For many of the accounts offered at all of the banks, account holders get a specified amount of ATM withdrawals free per month. Of the all accounts compared, only three FNB accounts, namely the Easy, Gold Cheque and Encore Gold Cheque accounts include cardless cash withdrawals in the free withdrawals.

In light of this, it would be cheaper to make use of your free ATM withdrawals each month before using cardless cash withdrawals. And when comparing the cost of a cardless cash withdrawal to a traditional carded cash withdrawal at an ATM FNB is the only bank where the fees are the same, R1.85 per R100. For Absa, Standard Bank and Nedbank, it is cheaper to withdraw using your card.

In order to save on bank charges, it would therefore be cheaper to stick with the standard carded cash withdrawal system than making use of the cardless option after your free withdrawals for the month have been exceeded.

However, with crime and fraud being a big issue in South Africa, surely it is safer for the consumer to conduct their ATM withdrawals without having to put their bank cards into the machine?

In a world where cards can be cloned and financial information is vulnerable, shouldn’t banks make it safer, and cheaper, for customers to conduct their banking? By withdrawing money from an ATM cardlessly, you are reducing the possibility of fraud at the ATM, where cards can be cloned or swapped without the consumer being the wiser until it is too late. Cardless cash withdrawals are therefore a safer option.

Another issue worth noting, is that not many people are aware that cardless cash withdrawals are an option for them, or how they work. Perhaps more focus should be placed on educating consumers about the facilities available to them.

The results 

 

 

Information according to the bank fees guides and consultation with the relevant banks. Accurate as of 15 June 2016.

*Includes cardless cash withdrawals

**All FNB fees are as per the new July 2016 fees guide

 

Handy tip: You can compare bank accounts on Justmoney by clicking here.

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