Banker with balls

I recently visited South Africa. Wow! Do the banks nail their customers with fees! I'm so used to the "free checking account" advertising in America that it made me pause when I saw a billboard from ABSA promoting the fact it appears that when comparing apples with apples it is better to pay their multitude of smaller fees, than a single larger monthly fee. (I stand to be corrected as I passed it hurriedly on a highway.) The image a scale weighing three smaller apples with one large apple outweighing the small ones.

You even pay for the privilege to use the banks' websites! It's similar to the old oligopoly in Canadian banking only appears to be even worse for consumers in South Africa. Just of the heck of it, entertain yourself for 5 minutes to make sense out ABSA's pricing options (internet fees detailed on page 47 of 61) compared to that of FNB's 2008 pricing guide! If you work for a bank it may just inspire you with a range of ideas for charges you never believed consumers would actually agree to pay.

But despite the heavy handedness with fees, the South African banks do have some of the most innovative banking technology in place for consumers. Mobile banking is old hat. You can make near instant bank to bank transfers with no need to wait 1-3 days. For security you can get a temporary additional PIN sent via SMS to you and much more.

Posted by Banker with balls at 08:12 PM | Permalink | Comments (0) | TrackBacks (0)

You may have seen Bob Garfield pointing out the new Realtor® TV ad in Advertising Age, attempting to convince people now is still an excellent time to invest in real estate. People have plenty to say about the ad and the industry on Bob’s blog.

I was amazed recently speaking with representatives from a company who is planning on launching a new company with real estate agents doing business the old way. In their opinion no more than maybe 2% of buyers will ever skip working with an agent and use web technology to find and conclude a real estate purchase. Gee, don’t know how many people sell their homes without at least a seller’s agent but counting the “For sale by owner” boards in our neighborhood it seems to be increasing in popularity.

I’ve rented an apartment over the internet, sight unseen, and recently purchased a vehicle on eBay. A friend purchased a $400K+ home over the internet without ever seeing it other than 360 video. No, that is not the average consumer, but plenty of people today are booking their own travel, buying stocks without a broker and trading happily on auction websites.

Continue reading "Buy real estate now! Your agent needs you." »

Posted by Banker with balls at 08:49 PM | Permalink | Comments (0) | TrackBacks (0)

>>Update: Thanks to Phil and Jim for pointing out that Wachovia doesn't give you $1 - they merely transfer $1 of your OWN money from your checking account to the special savings holding account. So that makes it far less attractive than my initial calculations. Also a good lesson in the importance of carefully reading bank marketing literature to not miss the details! 

So soon we'll see Wachovia breaking a new advertising program for their Way2Save "savings account". The spokesperson says they will make it "fun" for consumers although I miss where the fun part comes in. Similar to credit card rewards, the "fun" is primarily in shopping and then getting a small cut back from those funds.

The program seems quite rich (for first 3 years), paying $1 per debit card transaction or online bill pay, plus additional levels of complexity in limited transfers, changing interest rates and bonus payments. If you assumed no bank fees incurred with Wachovia, by my quick comparison calculations (per month 15 check card transactions, 3 bill pays, no additional deposits vs. 3.15% APY at ING DIRECT) you would need approximately $7,500 in an ING DIRECT Electric Orange account to earn more in interest a year than through your free Wachovia checking account linked up to Way2Save. Naturally there are additional comparisons in terms of ease, functionality, fees, etc. (Instead of using a debit card but a credit card with 1% cash back and paid your bill in full, the avg. balance you would need would be even lower).

Since you are limited to no more than $100 a month in additional deposits, and the account is opened with a $0 balance it really seems to be more of a checking account/check card rewards/cash back program than a "savings account". At the end of 3 years it converts to a regular savings accounts. So a great way to build habit and lock in customers into the use of their checking account. 

For those who already have a checking account with Wachovia and not willing to shop around for a better deal, seems like a no brainer to add this account. Curious to see the advertising! You have to open the account in a branch. A bummer for those who prefer to do their banking online. Let's see how this compares to the success of Bank of America's Keep the Change program. A pity that it takes so much complexity in banking to make something "fun". But hey, anything that will help people save, is a good thing.

Posted by Banker with balls at 07:21 PM | Permalink | Comments (4) | TrackBacks (0)