FNB is encouraging its mainstream customers earning below R100 000 per annum to embrace cheaper cashless transactions by rewarding customers to use their debit cards. In a market where cash is often drawn from an ATM to make purchases, card usage is now starting to show a greater acceptance.
– Point-of-sale transactions are up by 27% since launch
– Card fuel purchases are up by 116% since launch
– An average Smart customer earns rewards of around R24 per month
– October reward payouts to Smart customers topped a record of R7.5 million
The introduction of airtime as a reward to FNB’s lower income account holders is proving to be a strong driver of banking behaviour. Since this tailored offering was introduced in May 2012, there has been a 27% increase in point-of-sale purchases and a 116% increase in Smart customers using their cards to purchase fuel.
“We brought on this unique offering with our mainstream Smart account customers in mind. It caters specifically for these customers with a simple earn and pay out system with emphasis on their everyday lifestyle needs,” says Liné Wiid, CEO of FNB Transactional Banking and Mass Market.
FNB drives the use of electronic and digital platforms for transactions throughout its customer base. These platforms have proved to be a significant cost saver for the bank, which can then be passed onto the customer.
“Through our experience with our established eBucks Rewards programme, we know that incentivising is key to driving specific banking behaviour, and this is also working exceptionality well in the lower income market,” adds Wiid.
“The value in rewarding Smart customers with airtime lies in its simplicity,” says Wiid. “It is a straightforward earn and spend system and there is no subscription fee or registration required.. Airtime is a valued commodity in this market.”
Account holders earn airtime as a reward through depositing their salary into their account, buying airtime and electricity through FNB’s digital channels, buying groceries at Checkers and Shoprite as well as buying fuel using their debit cards. Customers can also earn more if they have more products with FNB. There is no subscription fee
“The most recent addition of rewards earned at Checkers and Shoprite speaks directly to this market, where one of the biggest expense items for the lower income household is grocery shopping,” says Wiid. “We have seen a significant increase in payouts in rewards since the introduction of additional partners and new rules; payouts to our Smart Account customers have almost doubled and October payouts topped an all time record of R7.5 million in one month.”
“The average Smart Account customer earned R24 in airtime last month, redeemable by simply using their phones. Considering that the average spend on airtime per month for our mainstream customers is R139, this is a substantial part of their spending and helps them stretch their limited funds,” Wiid says.
Since inception FNB’s mainstream account base has earned more than R50 million in rewards paid.
“Rewards systems, designed with the customer in mind, can be a very good incentive to drive specific banking behaviour and add good value to the customer’s experience and lives,” concludes Wiid.
Mainstream customers are those earning less than R100 000 per annum and includes FNB’s Smart Account customers as well as Smart Cheque account customers.
Smart Cheque Account holders are paid out in eBucks which account for 32% of payouts and Smart Transmission Account holders are paid out in airtime, which accounts for 68% of the rewards paid to Smart customers.
