You no longer need a bank account to be paid electronically by your employer. Three of the big four banks now offer employers a way to safely pay their |staff without them requiring a bank account, and the fourth has a cellphone product in the pipeline.
According to research conducted last year by Finscope, which tracks the use of financial products, 32 percent of South Africa's more than 27 million economically active people do not have bank accounts.
Yolande van Wyk, the chief executive of First National Bank (FNB) Smart Services, says the new offerings reduce the risk of theft and fraud, as well as the cost and inconvenience of handling cash.
The services the banks offer employers are as follows:
FNB
Pay Wallet, the new offering from FNB, enables your employer to pay your salary or wages through your cellphone.
Van Wyk says you have immediate access to your money at any full-service FNB ATM, without needing a bank card. Your employer can also buy you a pre-paid Visa card, which can be used at an FNB ATM and to make purchases.
How it works:
Your employer can use FNB online banking to capture your personal details as a Pay Wallet recipient, including your cellphone number and a personal identification number (PIN) you can use to access the money.
You will then receive an SMS telling you that you have been paid and how to access the funds at an FNB ATM using your cellphone and a secure PIN, if you do not have a pre-paid Visa card. If your employer has paid for you to have a pre-paid Visa card, you will able to use the card to access your funds at the ATM.
Costs:
Your employer has the option to sponsor up to two cash withdrawals for you, to reduce your costs.
You will pay bank fees as follows:
- A withdrawal at an FNB ATM will cost you R5.50 for amounts between R20 and R510, R11 for amounts between R510 and R1 010, and R16.50 for amounts between R1 010 and R2 500.
- Withdrawals at other banks' ATMs will cost you R11.25 for amounts between R20 and R510, R16.75 for amounts between R510 and R1 010, and R22.75 for amounts between R1 010 and R2 500.
- Purchase at a retailer: R2.
- Balance inquiry at an FNB ATM: R1.
- Balance inquiry at another bank's ATM: R3.25.
- Prepaid airtime purchase at an FNB ATM: free.
- Prepaid airtime purchase at another bank's ATM: R5.
Standard Bank
Your employer can load your salary onto a PayCard, which you can use to withdraw cash or check your balance at ATMs (it will cost you more at other banks' ATMs) and to make purchases at stores.
How it works:
The same card can be reloaded by your employer each week or each month. You will be assigned a PIN to use with the card, as with a normal bank card.
Costs:
Your employer has to pay R16 for the card and R16 each time the card is loaded.
You are allowed one free cash withdrawal and one free balance inquiry at Standard Bank ATMs each time the card is loaded. Thereafter, you pay R4.70 for withdrawals and R2.25 for balance inquiries at Standard Bank ATMs.
You pay nothing to use the card for purchases in stores.
Absa
In March this year, Absa launched CashSend Plus, which allows employers to make cash payments to employees.
How it works:
Your employer has to first add you to your company's online banking profile as a CashSend recipient.
Your employer will enter your cellphone number, the amount of money to be transferred to you, and will select a six-digit access code.
Absa will generate a 10-digit withdrawal number, which is automatically sent to your cellphone.
Your employer will have to give you the six-digit access code, as well as the amount of money you are to receive. You can then withdraw your money at |an Absa ATM, using the 10-digit withdrawal number and the six-digit access code, which Absa's computer system will validate.
However, you have to withdraw the full amount transferred by your employer, because CashSend does not allow partial withdrawals. Any unclaimed funds will be automatically returned to your employer's account after 30 days.
Costs:
It will cost your employer R6.50 a transaction plus R1 per R100 transferred, with a maximum fee of R15.50. Employers can send you up to R3 000 a day.
You do not pay any bank charges or fees to access your money.
Nedbank
Earlier this year, Nedbank and Vodacom announced they would be launching a joint offering, called M-Pesa, to the public. Pesa is the Swahili word for money and the M represents "mobile".
The product, which is already in use in Kenya, allows you to use your cellphone like a bank account and |debit card.
It allows consumers to credit their "account" at any merchant that sells airtime. You can then transfer an amount on your phone to another person's phone or redeem it as cash at a merchant.
Saks Ntombela, the managing executive for Nedbank's retail division, says details as to how the product will be implemented locally will be available in due course.