Customers could be charged for cash-for-cash transactions at banks

South Africans who want to conduct cash-for-cash transactions at retail banks will not necessarily get this service free of charge, as a Moneyweb reader recently found out.

Cash-for-cash transactions are when clients request lower denomination bank notes, or coins, for a specific amount.

The reader emailed Moneyweb, saying she recently went into a Standard Bank branch for a cash-for-cash transaction at the teller. Much to her dismay, she was told she would be charged a handling fee for the service.

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“I requested to exchange the R450 cash I had in my purse for R20 notes. Then, the teller asked me if I knew I had to pay for this service. He calculated the fee [based on the R450] and told me it would cost R235.

“I was speechless. Needless to say, I left without the change.”

Standard Bank confirmed to Moneyweb in an email that it does indeed charge a fee for cash-for-cash transactions.

“The fee is based on the cost of providing the service to clients, including the cost of providing lower denomination banknotes and coins in a branch.”

Alternatives

The bank pointed out that there are “alternative channels” for clients who need lower-value banknotes and/or coins.

“If a customer wants to exchange notes for coins, or wants smaller denominations, the customer can perform a ‘Cash Back at POS’ [point of sale] withdrawal at any one of the numerous partner retailer locations.”

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Standard Bank says this is at a “fraction” of branch fees.

Also, instead of withdrawing cash at the ATM and then changing to smaller denominations at a teller inside the branch, clients can withdraw at the teller directly.

“This would be more affordable than doing a cash-for-cash transaction,” Standard Bank says.

Moneyweb asked the South African Reserve Bank (Sarb) for comment on the matter, to which it responded: “The Sarb does not comment on the operational matters of the entities that it regulates.”

Other retail banks

Moneyweb approached South Africa’s other big retail banks to find out if – and how much – they charge for cash-for-cash transactions.

Capitec: The bank does not keep cash at its branches and therefore does not render cash-for-cash transactional services.

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Absa: Its branches charge a fee for cash-for-cash transactions “as prescribed by industry standard”. The fee is calculated according to Absa’s pricing guidelines, which are reviewed annually. In its 2024 pricing guidelines, Absa cautions clients to expect additional fees for any in-branch transactions.

First National Bank (FNB): Its branches do not charge any fees for what they call “cash swop transactions for large notes to smaller denomination notes and coins”. However, cash swops cannot be offered in instances where the transactions are not related to petty cash or float requirements and are for large amounts. Then, FNB will ask the client to deposit the notes and withdraw the required amount in coins from one of the tellers in a branch.

FNB also does not do cash swops from coins to banknotes. “We would require the customer to deposit the coins into their account and then do a normal withdrawal – either at our in-branch self-service devices or at the branch tellers.”

These options would be subject to FNB’s normal cost of cash deposits and withdrawals, as published in its pricing guides.

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Nedbank: Cash-for-cash transactions do not attract handling fees. “However, cash-for-cash transaction requests without depositing funds into an account are for Nedbank account holders only.”

All the banks confirmed to Moneyweb that they do not render any cash-to-cash services to clients who do not have a transactional account at the bank.

According to Standard Bank, this is because banks need to comply with Know Your Customer and Anti-Money Laundering regulatory requirements.

This article was republished from Moneyweb. Read the original here