First National Bank (FNB) is using its mini-ATMs to reach the underserviced as part of its deal with the Eastern Cape government to provide social grant recipients with free bank accounts.
FNB spokesman William Ramwell says according to the agreement, social grant recipients will be entitled to a free FNB bank account with government picking up the banking costs. They will then be able to access their money through the mini-ATMs as opposed to standing in long lines at pension payment services providers or social grant offices.
"Unlike a standard ATM, which costs R300 000 and needs 6 500 transactions a month to be viable, mini-ATMs costs less than R10 000 and only need to do 500 transactions a month to be viable," Ramwell says.
The mini-ATMs are installed within shops that have FNB bank accounts and allow anyone with an FNB bank card to check their bank balance or withdraw a receipt, which is then cashed in the store.
"The mini-ATMs also provide economic upliftment because the money drawn within the store is often spent in the store as opposed to customers going to the nearest town to draw their money and spend it there. Now they can access their money whenever the store is open and spend it in the communities in which they live."
He says the programme has been successful for everyone involved. "Around 50 000 social grant bank accounts have been opened at FNB, the holders are receiving free accounts and government has cut down on its delivery costs."
Ramwell says the delivery of the social grants previously cost government R24 per holder, while the bank account will cost R13.50 on average.
FNB will roll out 2 000 mini-ATMs by the end of the year and is negotiating with other provincial governments for the provision of accounts to social grant recipients.
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