How do SA banks keep getting away with fleecing the consumer

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Zellephant

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I am sure this topic has been discussed to death already, but the most recent article I could find dates back to 2019, and I am sure there must be some new developments in the excuses the banks come up with to fleece us.

But this issue again became so ludicrously apparent to me last night when I had to help make some transfers to pay for accommodation and studies for a family member studying in Europe.

I had to transfer R20k into their Euro bank account, and they needed the money pretty urgently (due to ridiculous delays in the payout of NSFAS bursaries and so on, which is a whole other story). A SWIFT transfer would have cost close on R850.00 in fees, and being a Friday evening, would probably only land in their Euro account around Wednesday next week, but I luckily have a Euro account too, so could pay from that instantly, and it cost me exactly R0.00. So I could pay 1000Eur, from A bank in Ireland, to a different bank in Belgium, and the money was in the recipients account within seconds, at 10:30pm on a Friday night.

So why on earth do SA banks still get away with charging ridiculous fees for real time payments (which inevitably take an hour or more to clear for first time payments), and get away with the ridiculous “2 to 3 business days” line for interbank transfers.

Then the real kicker, and what prompted this thread, this morning I decided to top up the balance in my Euro account to replace the money I paid out last night. So I log in to my Irish bank account, and transfer 1000.00 Euro in from my South African FNB account, they give me an option to do this via credit card payment, and the money is instantly available in my Irish bank account, for a charge of only 11Euro. I could have done a swift payment and that would have been free, but I would have ended up paying a heck of a lot more in bank fees etc at FNB (approx R850), and it would again take a couple of days to process.

Then, the further kick in the nuts, is the atrocious rate at which FNB calculates the exchange rate when debiting the rand balance from my credit card account. Mid market rates this morning are sitting at around R20.50 to the Eur, but FNB charges me R20.90, pocketing themselves a nice healthy R400.00 on the deal…. But if I had to sell them Euros this morning they would only pay me R20.10 per Euro….

So they fleece us on monthly account fee, transaction fees, forex fees (and insane manipulation of buy and sell rates), interbank payment fees, cash deposit fees, debit order fees the list goes on and on. How do they keep getting away with this, and why has no one been able to step in and disrupt the local banking scene properly? I don’t mean low cost banks like capitec etc, they are great, but they still operate on the same archaic 2 day clearance between banks nonsense, and charge extra fees for just about everything.

How can it be possible to pay money between separate countries, not just separate banks in the EU in real time 24 hours a day/7 days a week, but our banks can justify charging R40.00 per transaction for that same service, and everyone just accepts it.
 
Zellephant said:
I am sure this topic has been discussed to death already, but the most recent article I could find dates back to 2019, and I am sure there must be some new developments in the excuses the banks come up with to fleece us.

But this issue again became so ludicrously apparent to me last night when I had to help make some transfers to pay for accommodation and studies for a family member studying in Europe.

I had to transfer R20k into their Euro bank account, and they needed the money pretty urgently (due to ridiculous delays in the payout of NSFAS bursaries and so on, which is a whole other story). A SWIFT transfer would have cost close on R850.00 in fees, and being a Friday evening, would probably only land in their Euro account around Wednesday next week, but I luckily have a Euro account too, so could pay from that instantly, and it cost me exactly R0.00. So I could pay 1000Eur, from A bank in Ireland, to a different bank in Belgium, and the money was in the recipients account within seconds, at 10:30pm on a Friday night.

So why on earth do SA banks still get away with charging ridiculous fees for real time payments (which inevitably take an hour or more to clear for first time payments), and get away with the ridiculous “2 to 3 business days” line for interbank transfers.

Then the real kicker, and what prompted this thread, this morning I decided to top up the balance in my Euro account to replace the money I paid out last night. So I log in to my Irish bank account, and transfer 1000.00 Euro in from my South African FNB account, they give me an option to do this via credit card payment, and the money is instantly available in my Irish bank account, for a charge of only 11Euro. I could have done a swift payment and that would have been free, but I would have ended up paying a heck of a lot more in bank fees etc at FNB (approx R850), and it would again take a couple of days to process.

Then, the further kick in the nuts, is the atrocious rate at which FNB calculates the exchange rate when debiting the rand balance from my credit card account. Mid market rates this morning are sitting at around R20.50 to the Eur, but FNB charges me R20.90, pocketing themselves a nice healthy R400.00 on the deal…. But if I had to sell them Euros this morning they would only pay me R20.10 per Euro….

So they fleece us on monthly account fee, transaction fees, forex fees (and insane manipulation of buy and sell rates), interbank payment fees, cash deposit fees, debit order fees the list goes on and on. How do they keep getting away with this, and why has no one been able to step in and disrupt the local banking scene properly? I don’t mean low cost banks like capitec etc, they are great, but they still operate on the same archaic 2 day clearance between banks nonsense, and charge extra fees for just about everything.

How can it be possible to pay money between separate countries, not just separate banks in the EU in real time 24 hours a day/7 days a week, but our banks can justify charging R40.00 per transaction for that same service, and everyone just accepts it.
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You have good points, but a number of flaws too.

Firstly, the Eurozone is effectively a single country for banking purposes. Secondly, any half decent bank account in South Africa doesn't charge for EFT payments. Thirdly, swift takes a day at most - often it is even same day. Also, I don't know when last a non-instant EFT payment I made didn't clear that same evening, or next morning at the latest.

Banks have ridiculous forex rates, one really shouldn't be using them. Far better to use Shyft for forex transfers.
 
bwana said:
You answered your own question.
Click to expand...
Okay, true. So actually the question is why do we just keep accepting it, and how do we change it. And why hasn't any of the newcomers onto the scene been able to change the status quo.

For me, personally, I am just systematically moving more of my financial life offshore. I keep most of my cash in my Irish bank accounts, and use my Irish debit card in SA for all my day to day purchases, but that isn't practical for paying medical aid, insurance and rent etc that has to be paid via debit order or EFT. Again I can use my Irish bank card for everyday purchases for free in SA, but if I use my FNB Cheque or Credit Card overseas, I get charged an extra fee for every transaction. Why is this just accepted as normal by SA consumers
 
Man, don't get me started on the forex, especially, with FNB.

Back in 2016, or was it 2017?

Anyway, I came back from my overseas trip with dollars and decided to exchange them after a few days. Wish I didn't but I did.

So, went to FNB and they literally screwed me. Like you pointed out, they paid me less than the rate at that time.

Besides our apprehension, I also think we have systems in place that place us as citizens right at the back when dealing with banks. Those scumbags are well protected by the so-called rules/laws/regulations in this country.
 
Zellephant said:
Okay, true. So actually the question is why do we just keep accepting it, and how do we change it. And why hasn't any of the newcomers onto the scene been able to change the status quo.

For me, personally, I am just systematically moving more of my financial life offshore. I keep most of my cash in my Irish bank accounts, and use my Irish debit card in SA for all my day to day purchases, but that isn't practical for paying medical aid, insurance and rent etc that has to be paid via debit order or EFT. Again I can use my Irish bank card for everyday purchases for free in SA, but if I use my FNB Cheque or Credit Card overseas, I get charged an extra fee for every transaction. Why is this just accepted as normal by SA consumers
Click to expand...

Use a capitec card overseas. They charge mid-market rates and no extra fees.

Your question as to why "we just accept it" is answered by the reason for you not moving your forex purchases to Capitec and swift to Shyft.
 
Speedster said:
You have good points, but a number of flaws too.

Firstly, the Eurozone is effectively a single country for banking purposes. Secondly, any half decent bank account in South Africa doesn't charge for EFT payments. Thirdly, swift takes a day at most - often it is even same day. Also, I don't know when last a non-instant EFT payment I made didn't clear that same evening, or next morning at the latest.

Banks have ridiculous forex rates, one really shouldn't be using them. Far better to use Shyft for forex transfers.
Click to expand...
South Africa is also a single country, so why shouldn't interbank transfers all be instant and free. Why is it seen as acceptable to charge an extra fee for them? That is my point. And no, EFTs are not as fast as you claim. You have to comply with all manner of cut off times etc etc to ensure that the payment reflects in the other persons bank account the next morning. If you EFT someone at 10Pm on a Friday night, they definitely won't get the money before Monday or Tuesday,
Carl_Johnson said:
NSFAS pays for studies overseas?!?!?!?!
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Not really the point of the thread, but maybe I am wrong about it being NSFAS, all I know is bursary payouts at Stellenbosch have been delayed multiple times, should have been paid end of February and still haven't. That includes NSFAS and other university admistred grants etc.
 
Zellephant said:
South Africa is also a single country, so why shouldn't interbank transfers all be instant and free. Why is it seen as acceptable to charge an extra fee for them? That is my point. And no, EFTs are not as fast as you claim. You have to comply with all manner of cut off times etc etc to ensure that the payment reflects in the other persons bank account the next morning. If you EFT someone at 10Pm on a Friday night, they definitely won't get the money before Monday or Tuesday,

Not really the point of the thread, but maybe I am wrong about it being NSFAS, all I know is bursary payouts at Stellenbosch have been delayed multiple times, should have been paid end of February and still haven't. That includes NSFAS and other university admistred grants etc.
Click to expand...

You're welcome to vent anger, but that doesn't change facts.

I haven't paid for instant EFT in years - get a proper account. There aren't "all manner" of cut off times - it's a single cut off time for your bank. Also, payment at 10PM on Friday night should be in recipient's account on Sunday morning. Obviously EFTs to same bank are all instant.
 
Speedster said:
Use a capitec card overseas. They charge mid-market rates and no extra fees.

Your question as to why "we just accept it" is answered by the reason for you not moving your forex purchases to Capitec and swift to Shyft.
Click to expand...
Thanks, will look into the capitec account for international purchases. If they are using mid-market rates that's awesome.

I avoid SWIFT transfers like the plague. It's the main reason I ended up opening a bank account in Ireland, that can be funded instantly from any visa or mastercard within seconds.
 
Zellephant said:
Thanks, will look into the capitec account for international purchases. If they are using mid-market rates that's awesome.

I avoid SWIFT transfers like the plague. It's the main reason I ended up opening a bank account in Ireland, that can be funded instantly from any visa or mastercard within seconds.
Click to expand...
What is the monthly cost of the Irish account? And are you charged a percentage fee to do credit card topups?
 
Carl_Johnson said:
So the student is spending the NSFAS money in Europe?
Click to expand...
Again, not the point of the thread, and like I said, I might be mistaken about it being a NSFAS bursary, or a different bursary administered by the university directly. The bit that matters is the payouts have been delayed causing a situation…. The student is a stellenbosch student and doing research in the Netherlands as part of a PhD. Not really sure why this is the bit you are choosing to get hung up on
 
Speedster said:
What is the monthly cost of the Irish account? And are you charged a percentage fee to do credit card topups?
Click to expand...
Zero account fees if the balance remains above 500Euro. The only costs are to transfer money in with credit card top ups, and that is % based, and also there are currency conversion fees for direct transfers into the account from non euro based accounts (similar to inbound forex fees on swift payments to an SA account), but I don't generally use that. My EU clients pay me direct into the account, and I sometimes do credit card topups from my SA FNB account if needs be.

My account is with N26, and I also have a revolut account, but use that less often.
 
Zellephant said:
Zero account fees if the balance remains above 500Euro. The only costs are to transfer money in with credit card top ups, and that is % based, and also there are currency conversion fees for direct transfers into the account from non euro based accounts (similar to inbound forex fees on swift payments to an SA account), but I don't generally use that. My EU clients pay me direct into the account, and I sometimes do credit card topups from my SA FNB account if needs be.

My account is with N26, and I also have a revolut account, but use that less often.
Click to expand...
Isn't N26 German?
 
Zellephant said:
Yes, but licensed in Ireland and I opened it using an Irish address.
Click to expand...
I don't think they're licensed in Ireland. They have a German banking licence and due to European Central Bank rules, can operate across the Eurozone (which obviously includes Ireland).
 
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