Former FNB CEO Michael Jordaan announced in January they plan to launch Bank Zero in South Africa in the beginning of 2019.
Bank Zero will be app-driven, and promises to offer clients lower fees, richer functionality, transparency, and better control.
The bank will not have branches, but customers can use ATMs locally and internationally to access cash.
In a recent interview, Jordaan said they are in the final stages of getting their licence from the South African Reserve Bank.
After they receive it, Bank Zero will start the integration process into the various payment systems in South Africa.
This is needed to ensure that you can draw cash as ATMs, use debit orders, make payments to other banks, and that your card will be accepted at POS machines.
Free electronic transactions
Jordaan said the biggest feature of Bank Zero is its low cost base, which is partly possible through reliable open-source software which can be used to build the banking platform.
This lowers the financial barrier-of-entry to new banks, and these savings can be passed on to consumers.
Jordaan said the name Bank Zero hints at what they believe the price for banking could be in the mobile and digital space.
“We think electronic transactions should be free and that would be a big benefit to South African consumers and business,” he said.
He added that South Africans pay far too much for their electronic banking fees, which is what Bank Zero plans to change.
Free credit card swipes
In response to questions about credit card fees from MyBroadband, Jordaan said they cannot reveal their features or pricing until they launch – for fear of being copied.
He did, however, say that when individuals swipe their debit or credit cards locally, there is usually no fee attached.
In the case of business debit or credit cards, though, an additional fee per swipe is often charged.
“We hope to compete away this anomaly,” Jordaan said.
“We also hope to similarly attack fees when it comes to digital, mobile payments – but you will have to wait for launch to see exactly what this means.”
Excellent security features
Jordaan said Bank Zero will be an app-based service, which will rely on a fairly-advanced smartphone.
The reason is that they want to offer cutting-edge security features, including facial recognition, fingerprints, voice recognition, and location-based services.
He explained that modern smartphones have many security features which online banking does not have, and they want to use these features.
Making banking easier
Jordaan said they also looked at all the banking processes which irritate consumers and made them as easy as possible.
Although Bank Zero will still adhere to all regulatory requirements, he said there are clever ways to use technology to make it easier for a customer to use.
“We want to make the bank account opening and switching process as easy as possible for new customers,” he said.
“We have also come up with 13 new features which we have not seen banks in the rest of the world adopt.”
Bank Zero will therefore not only offer lower fees, but new functionality too.