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Capitec disrupts business banking by charging the same as personal banking

27 February 2024 Capitec

The bank will save businesses up to 50% in banking fees

The World Economic Forum recently highlighted how an estimated 5.78 million small and medium-sized enterprises (SMEs) in South Africa don’t have bank accounts because of high bank charges and transaction fees. To break these barriers, Capitec Business has introduced a unique and more inclusive banking solution for South African businesses with new pricing effective from 1 March.

The bank promises simplicity, transparency, and affordability across all business sectors and sizes with no discrimination, challenging conventional banking’s complex products and convoluted fee structures. It reduced its pricing to a flat R50 monthly fee and the same transaction fees that apply to 21 million personal banking clients, regardless of the size or format of the business.

Gerrie Fourie, CEO at Capitec, says supporting businesses, especially SMEs, is crucial to help stimulate growth in South Africa, 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. 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 transaction fees from 1 March will save businesses up to 50%
• 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
• R3.50 per debit order
• R6.50 for immediate payments
• And a low, fixed monthly fee of R50

Disrupting the convention with one account to all businesses at the same price
Capitec says it was always a part of their plan to disrupt business banking fees, driven by a commitment to uphold the bank's ethos of simplicity and affordability. This was informed by direct client feedback, guiding it to set a new standard by offering businesses more value for money.

Fourie elaborates on the bank's decision, "Our approach to business banking is client-centric in the same way we do for our retail bank. 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. 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."

Empowering business growth through credit and personalised service
Capitec says it realises that competitive fees alone are not enough to enable business growth. That’s why, in addition to the new fee structure, the bank also offers a range of products and services to support businesses’ dynamic needs:

• New clients can open a business bank account online or on the app in minutes, with no paperwork.
• Free access to digital banking through their app or online portal enables businesses to manage their finances effortlessly from anywhere at any time.
• Everyone, big or small, gets personalised service and support through exclusive access to a Relationship Banker for all their business needs.
• Quick approval of an overdraft, property and asset finance to help businesses or franchises grow.
• Forex services, rental finance solutions and payments services makes it more convenient and more affordable to run a business.
• New generation touch-screen card machines are delivered to your door with a lower commission structure and free same-day settlements 7 days a week.

Banking on digital solutions for intuitive service
Capitec says its new fee structure aligns with its digital banking strategy to give clients complete control and access to exactly what they need when they need it. “Our bank is on a journey to deliver a digitally-led, relationship-based solution, aiming to deliver 80% of all products and services through the app or online banking. This digital focus allows Capitec to streamline processes and reduce costs, as well as to scale our banking to millions of businesses around the country, making sure that no business is left behind,” adds Fourie.

The leading digital bank says it provides access to professional business bankers in person or through online banking and the app instantly when businesses require personal engagement. This ensures that business clients can engage at the level needed without taking time away from their business to go to the bank. It also creates a seamless and intuitive banking experience that meets clients’ needs in a hybrid world.

Fourie concludes, “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. We believe that 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."

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