SA's Bank Zero launches app-based business banking

South African app-based digital bank Bank Zero has made the move into commercial banking, taking on traditional banks in the market with its zero monthly fees proposition.

"Bank Zero is ushering an innovative new approach far from the legacy 'me-too' solutions of traditional banks," said Bank Zero Chairperson Michael Jordaan.

"We have completely rethought commercial banking to bring it into the digital age. We've built it from the ground up, which means we have no legacy systems that are both cumbersome and costly, leading to inefficiency and high bank charges," Jordaan added.

The idea for Bank Zero began in 2018, but it only launched in South Africa in August 2021 with a technology-driven approach to banking.

It doesn't have any physical bank branches and relies largely on its website and mobile app for sign-ups and transactions.

The digital bank's selling point is it has zero monthly fees and also doesn't charge fees for electronic payments, debit orders, card swipes and the purchasing of prepaid airtime, data or electricity. It also doesn't offer any loan products.

The majority of its digital transactions are free, but it does have some third-party costs like withdrawals or transaction charges for sending cash to recipients though retail partners like Checkers or Shoprite – charged at R8.50 (US$0.44) per transaction.

Bank Zero came into the South African market after other digital bank competitors like TymeBank and Discovery Bank.

It was founded by seven investors, including former First National Bank (FNB) CEO Jordaan, and Yatin Narsai who was FNB's former head of IT and retail banking and now is Bank Zero's CEO. The bank is 45% Black-owned and 20% women-owned.

Jordaan is a prolific tech investor and was also an early investor in South African mobile network Rain.

Commercial banking approach

CEO Narsai said launching the app-based commercial banking service was a complex project but the end result was "ground-breaking."

"Because we were able to design the system as a whole, it works seamlessly with the user in mind. Everything from setting up your in-house banking team, changing mandates and granting access privileges, to making payments is all done within the app. It's easy to set up and manage a flexible team of in-house 'relationship bankers' to do the legwork, and authorisers to approve transactions," Narsai said in a statement.

Bank Zero CFO Liné Wiid highlighted that for most users doing commercial banking on an app is a radical shift but promised that the process is easy and will bring productivity and security for both big and small enterprises.

"Using legacy commercial banking was extremely time consuming, requiring manual paperwork and branch visits. As I detail in my blog, when we do our banking during the busy month-end period, what used to take a day takes an hour," Wiid explained.

Bank Zero's commercial banking app promises enhanced productivity and significantly lower costs, claiming its costs are in the region of 85% lower than the packages offered by South Africa's "big four banks."

Bank Zero said it rethought commercial banking to bring it into the digital age. (Source: Bank Zero website)

Narsai said that security was key when designing the business banking product.

"For example, changed account details are flagged, and supporting documents can be added to payments for authorisation," he explained. "It's designed to enhance productivity while being very secure. Some business customers also enjoy using our informative scheduled payments and transfers to automate regular payments."

Other features on the banking app include the ability to download transaction histories into spreadsheets and set up business debit cards for staff.

Bank Zero Commercial Banking can supply card machines through a partnership with iKhokha and is fully integrated with Xero Accounting, it said.

"The foundation for doing bulk payments and collections is in place, and will be released later," Narsai added.

Last week, mobile operator MTN's Mobile Money platform (MoMo) also launched a business wallet in South Africa.

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*Top image source: rawpixel.com on Freepik.

— Paula Gilbert, Editor, Connecting Africa