We tested Bank Zero and it was impressive

Bank Zero recently invited journalists to a closed beta test and the experience was impressive — from opening our accounts and receiving our debit cards, to the features the bank offers through its app.

We signed up for an account and tested the bank’s entire onboarding process, including its online Know Your Customer system (known as FICA in South Africa) and ordering a customised debit card through the app.

Bank Zero was first unveiled in January 2018 by founders Michael Jordaan and Yatin Narsai after the South African Reserve Bank granted it a mutual banking licence.

Initially set to launch in 2018, the public launch of Bank Zero was delayed several times, allowing Discovery and TymeBank to beat it to market.

While Bank Zero is a latecomer to the South African digital banking space, it remains confident that its value proposition will be good enough to convince new customers to sign up.

Like its competitors, it offers no monthly fees, no fees on payments, no payment for statements, and no costs for buying prepaid data, airtime, and electricity.

Bank Zero charges R9 per R1,000 for cash withdrawals at ATMs and R2 to draw cash at Pick n Pay, Checkers, Shoprite, and Usave points of sale.

Major features that Bank Zero promises are giving clients better control over authorising online purchases, debit orders, and disputing card transactions.

It only has one account type, which will be attractive to business customers who typically pay higher fees than retail customers.

The same pricing structure is offered across individual and business banking. Bank Zero currently supports (Pty) Ltd’s, CCs, and Sole Proprietors, with trusts and partnerships to be included later.

Signing up for a Bank Zero account is easy and happens entirely in Android and iPhone smartphone apps.

You begin by providing your cellphone and ID number, and the name you prefer to be called by.

A one-time PIN is sent to your phone to verify your number, and from there, you are taken through FICA and card customisation.

Anyone who has signed up to a cryptocurrency exchange in the past four years will be familiar with the process Bank Zero follows for FICA:

• Capture a series of selfies — looking forward, looking over your left shoulder, and looking over your right shoulder.
• Record one of the sentences the app will give you to speak.
• Upload pictures of your ID, driver’s licence, or passport.
• Upload proof of address.

Bank Zero verified our FICA documents in minutes, but this will likely vary depending on the volume of new sign-ups the bank is dealing with at any given time.

During account creation, you will select a profile picture that Bank Zero will show in the app and print on your card.

You can also customise the text on the card, with two lines available should you wish to use them.

Once you have customised your card, you can have it delivered to Pargo pickup points at Clicks stores for R79, or have it couriered to you for R139 in main centres or R179 in regional centres.

The card can’t be used until you activate it in the app, and Bank Zero disables ATM withdrawals by default.

Your card’s PIN is also set from the app.

If you try to use your card while it is un-activated or locked, you will be charged a nuisance fee of R2.

Bank Zero also made it so you have to authorise all tap-to-pay transactions with your PIN by default, including small amounts.

This has some drawbacks, as not all card machines are correctly set up to accept PINs on small amounts, which may cause transactions to decline.

Should this happen, Bank Zero said all you have to do is insert your card and retry the transaction.

The Bank Zero app, while still rough around the edges, offers an impressive array of features.

You get the usual gamut of functionality such as setting up EFT payments, buying prepaid electricity, airtime and data, setting your purchase limits, and opening additional accounts (including business accounts).

In addition to these, Bank Zero accounts offer various permission-related features that you can configure from within the app.

You can add people as friends, allowing them to see transactions on your account and making it easy for them to transfer money to you.

You can also add people as “support staff”, allowing them to create payment recipients and initiate transactions. You must still authorise the transactions they create.

When creating a new recipient, you can also limit which “support staff” may initiate transactions to that beneficiary.

The last permission level you can grant on your account is “Authoriser”. People with this level of access can authorise online payments.

Bank Zero also boasts features to give clients greater control over debit orders and online purchases.

According to an emailed welcome pack Bank Zero sent after we signed up, you have to authorise every online purchase in the app.

This is in addition to whatever 3D Secure mechanism a merchant might use to ensure transactions are legitimate.

Bank Zero said this is to help combat card-not-present fraud, which happens when a criminal gets hold of your card details and makes online purchases with it.

Card skimming fraud is not possible because Bank Zero said it rejects any swipe transactions. If you try to swipe your card at a payment terminal, you will be prompted to tap or dip your card instead.

To combat rogue debit orders, Bank Zero said it would alert you about new debit orders in the app and via email.

It will also warn you when a debit order is about to run, and there isn’t enough money in your account.

“You have until the next business day to fund your account. If we return your debit order as unpaid, a nuisance fee will be charged,” Bank Zero stated.

“With this feature, you never need those expensive overdrafts.”

Overall, we came away impressed with our Bank Zero experience. It gives you everything you want from a digital-only bank and then some.

This is a promising launch from the company that set out to kickstart South Africa’s branchless banking revolution. We look forward to seeing how the bank’s offering evolves.

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