South Africa's newest digital bank, Bank Zero, is ready to launch public operations in the first half of next year, following its announcement today that it has gone live with its debit card.
The bank, which is entirely app-driven on smartphones, says following this card go-live, rigorous health-checks such as simulated card attacks, card fraud detection and retailer readiness are under way.
Bank Zero has since March been undergoing end-to-end beta testing among its employees.
The bank says it has already implemented its robust electronic funds transfer payments capabilities and had been processing payments and debit orders, as well as facilitating purchases of prepaid items such as data, airtime and electricity, prior to today’s announcement.
Now, Bank Zero says through open source technology, combined with a scientific design approach, it has delivered its debit card in record time.
Mastercard teams from SA, India and the US were closely involved in validating and commissioning the card solution, according to the bank. IBM’s global expertise in encrypted card security was also tapped into.
Bank Zero chairman Michael Jordaan says: “Globally, banks are big spenders on such projects, often spanning multiple years, but sweat capital along with an integrated business-and-tech design approach is our strategic advantage.”
Yatin Narsai, Bank Zero CEO, notes: “During the development of Bank Zero, no traditional banking systems were bought, nor was any outsourcing done – these are expensive yet conventional solutions. We wanted to create an exciting customer offering which required building our own systems.”
According to Narsai, in just over a year, three large ‘payment rails’ were created by the bank, each from a clean slate.
He says this included direct integration into the South African Reserve Bank’s system, in order to become a settlement bank of electronic payments (EFTs) and debit orders, establishing Bank Zero as a clearing bank and one that issues and processes debit cards.
Narsai explains: “Zero pricing, along with our advanced card security, are just some of the ways in which we make our customers’ lives easier. We also bring special functionality around social connectedness, transparency, control, advanced payments and a focus on savings. Feature-rich banking must never force customers into paying exorbitant fees.”
Bank Zero now joins the list of newcomers that have ignited a financial revolution in the country, consequently triggering a price war among financial institutions.
Other notable players in the space include TymeBank and Discovery Bank.
TymeBank, which bills itself as SA's first digital-only bank, wholly-owned by billionaire Patrice Motsepe's African Rainbow Capital, launched to the South African public last year.
During the same time, insurer Discovery unveiled what it describes as the “world's first behavioural bank”, a fully digital bank that anyone with a smartphone can join, starting operation from March.
TymeBank showed massive growth in its first four months of full operation, reaching 400 000 customers at the end of May.
Since TymeBank went live, Capitec shaved 50c off its Global One account’s monthly fees. Nedbank followed suit, cutting the monthly account fee on its pay-as-you-use account in April.
In June, Nedbank rolled out Unlock.Me, a zero-fee digital product aimed at customers younger than 25. In November last year, Nedbank launched a no-fee mobile wallet account, MobiMoney.
In May, Standard Bank unveiled its MyMo account, which carries a monthly fee of R4.95, undercutting Capitec’s Global One by 5c.
In a similar move, First National Bank announced that from 1 July, customers would pay reduced monthly fees for Easy Pay As-You-Use (R5.75 to R4.95), Easy Account Smart Option (R65 to R59) and Gold Fusion (R155 to R109).
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