Standard Chartered Bank has decided to close its online banking service, 20Twenty, and has given its clients 60 days to pay up and move to another bank.
A letter sent to clients today says they have two options - they can either move to Pick 'n Pay Go Banking, or to another bank of their choice.
Clients who have positive account balances will have their funds transferred free of charge. However, those using the credit lines will either have 60 days to settle their accounts or must apply for a personal loan from Standard Chartered.
The letter states that Standard Chartered Bank will focus on its core international strength of home and personal loans.
"After exploring various options, we are pleased to confirm that we have identified a reputable and like-minded financial services provider in Pick 'n Pay Go Banking. With their non-conventional approach, Pick 'n Pay Go Banking can offer you similar banking products and service channels (telephone, Internet and ATM banking) with competitive fees," the letter states.
Clients will be able to select their preferred option from 16 January and Standard Chartered Bank says it will take three days to effect the transfer. From 10 March, online banking and credit card services will no longer be available.
"We have had to take a number of tough business decisions to ensure our growth strategy in SA," says Lauren Callie, head of Standard Chartered Bank`s corporate affairs. "20Twenty provided valuable insight into the South African banking industry and allowed us the expertise to launch additional products."
Clients will be provided with a comprehensive list of questions and answers via their contact centre to assist with any further information, she says.
20Twenty bank`s estimated 40 000 customers remained loyal to it when it went through a similar situation five years ago when its original parent Saambou collapsed.
In November Standard Chartered said it was looking for a buyer for the unit, which it had bought for an estimated R10 million from the Saambou curator.
About 100 staff should be affected by the decision, but Standard Chartered has said it will offer severance packages above the regulatory requirements or give staff the option to transfer to another division.
"It is sad, because this removes something from the financial services industry that was vibey and creative and puts it back in the land of the gentry," says Craig Terblanche, business and technology advisor at research consultancy MarketWorks.
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