Bank Zero - how a bank that charges no fees makes money

Jan

Who's the Boss?
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How Bank Zero makes money

Bank Zero founder Michael Jordaan said while they have no fees on many transactions, they make money through interest rate margins and interchange fees.

On Tuesday, Bank Zero officially launched to the public, offering a bank account with no monthly subscription fee and lower transaction costs than transactional banking accounts.
 

tridev

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How much are the international card payment and ATM fees vs other banks?
 

saturnz

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fractional reserve banking is the way commercial banks make money

The theory holds that, in a system of fractional-reserve banking, where banks ordinarily keep only a fraction of their deposits in reserves, an initial bank loan creates more money than it initially lent out.
 

saturnz

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No thanks. They bring nothing new that's enticing. There's no reason at all for anybody to use them.

I'm no fan of banks, but if this is the same Michael that ran FNB for a while then his service delivery will probably be much higher than other banks, atleast thats my experience with FNB while he was the head
 

Aghori

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fractional reserve banking is the way commercial banks make money

Most of the banks are haraam, with interest and greedy surcharges designed to fleece you as much as legally possible. Fictional creation of wealth is their forte.
 

backstreetboy

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6spdmanual said:
offering a bank account with no monthly subscription fee and lower transaction costs than transactional banking accounts.
Tyme bank has been doing that since 2019 and with a better interest rate at 7% (100k cap but that's enough for liquid money).
I'm no fan of banks, but if this is the same Michael that ran FNB for a while then his service delivery will probably be much higher than other banks, atleast thats my experience with FNB while he was the head
Doubt it. They only have email contact not even a 24/7 call centre.
They're easily the best priced business account I'm aware of
Business banking without a proper internet banking portal. Good luck with that.
 

Pineapple Smurf

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Name 1 reason why anyone would stop using their current bank and move over to this new bank in the sky that doesn't even have a brick and mortar building? What would the benfits be? I am already on FNB and break even with eBucks vs monthly bank charges
 

Zyzzyva

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I imagine they are quite risk averse and conservative because they must have burnt through quite a bit of money with all the delays. Hopefully once money is coming in they will feel more comfortable upping the interest rate because at current levels i don't see why many people will change over to them. The gimmick of "zero fees", found in the name of the bank, just doesn't mean that much anymore. The expectation of their launch done more for consumers than the launch itself, because it inspired other banks to launch similar products long before they perhaps would have. This is a classic buy the rumor sell the fact.

Being a tech first bank, should mean they are fast moving, able to out innovate the lumbering larger banks with legacy baggage to support, but you have to wonder what went on behind the scenes because so far they have moved slower than everyone else and lost the advantage of their primary gimmick. Perhaps the foundations are now laid, and they have the infrastructure in place to move much quicker in the future, but so far we just haven't seen it.

If Thyme bank can offer higher interest rates, then the underlying numbers should mean at some point in the future they should be able to do the same.

I was quite bullish when Bank Zero was first announced, but their failure to launch on time and the low interest rates has made me question the whole thing. Hopefully they have a lot in the pipeline ready to be revealed, and soon, because from where I'm sitting i don't see the point of changing over to them.
 

Speedster

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Name 1 reason why anyone would stop using their current bank and move over to this new bank in the sky that doesn't even have a brick and mortar building? What would the benfits be? I am already on FNB and break even with eBucks vs monthly bank charges
I'm moving my small business account
 

Sapphiron

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Name 1 reason why anyone would stop using their current bank and move over to this new bank in the sky that doesn't even have a brick and mortar building? What would the benfits be? I am already on FNB and break even with eBucks vs monthly bank charges
Have you been to a brick and mortar bank recently?

My experience with Absa recently is when I had a problem that could not be sorted out via the on-line platforms I went into the bank. The staff could not help with, pointing me to "on-line services". I asked to speak to the manager, but could not as he was working from home. I asked he was available virtually and they looked at me like I was an alien.

brick and mortar is just wasting your money.
 

Pineapple Smurf

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Have you been to a brick and mortar bank recently?

My experience with Absa recently is when I had a problem that could not be sorted out via the on-line platforms I went into the bank. The staff could not help with, pointing me to "on-line services". I asked to speak to the manager, but could not as he was working from home. I asked he was available virtually and they looked at me like I was an alien.

brick and mortar is just wasting your money.
Ok,
then answer my question please.
Why would anyone move over to this new bank?
 
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