Johannesburg - Shedding its image as a bank only for the wealthy, Nedbank is about to launch an aggressive campaign to win the hearts and cash of the middle and lower markets by making banking more affordable.
Nedcor hoped to halve banking charges through Pick 'n Pay Go Banking, a division of Nedbank, and offer higher interest rates on transmission and savings accounts by using the supermarket as a branch and replacing the bank teller with a cashier.
But the initiative, which enables shoppers to withdraw money and pay their bills at a supermarket till, has attracted only 130 000 account holders.
Pick 'n Pay said Go Banking, available at more than 5 000 till points in more than 200 stores, was still growing.
The R29.3 billion a year supermarket chain said the number of Go Banking customers rose 23 percent and deposits increased 25 percent in the year to February.
And that is without either Nedcor or Pick 'n Pay pushing the product.
Nedcor chief executive Tom Boardman said when releasing the banking group's interim results last week: "We just wanted to make sure that we were strong and all of our branches were lined up before we start ratcheting that lever.
"But I can tell you the other banks are not going to like it."
Nedcor's rivals, Absa, Standard Bank and First National Bank, have already staked a claim to 84 percent of the mass market.
"On the retail side the only place we are really strong is in the top end," said Boardman.
"We have been seen as the snobbish and elitist bank. But with the integration of NBS and Peoples Bank we are widening our customer range and our branch footprint," he said.
The country's banks are committed, in terms of the financial services charter, to broadening access to transactional banking.
About 52 percent of adult South Africans do not have bank accounts, compared with 57 percent in Brazil but only 10 percent in the UK.
The high cost of banking is often cited as the primary reason low-income groups have shied away from keeping their money in banks.
The Go Banking initiative charges a minimum of R12. Cheque deposits and cashpoint balance inquiries are free.
"If you can draw money from a Pick 'n Pay for R4, and drawing from your own bank's ATM costs you R7 and a Saswitch charges you R13 ... where are you going to draw your cash?" Boardman asked.
"That is a piece of our retail strategy that we are now starting to push," he said.
Five years ago IBM Business Consulting Services said that supermarkets had the opportunity to become a major force in the financial services sector.
It estimated that supermarket banks, which were first introduced to the UK market in 1997, would grow 149 percent from 5.8 million customers in 1999 to 14.43 million by 2008.
The concept of stripping away the formalities of ordinary banking is not new to South Africa - or Boardman, who headed BoE at the time of its merger with Nedcor.
Boardman oversaw the private bank's first foray into the mass market when its link with Pep Stores rolled out Pep Bank about three years ago.
BoE's mass market banking momentum was lost when it was sucked into Nedcor's megamerger.