News

ATM access is challenge for NZ supermarket bank

August 3, 2003

WELLINGTON, New Zealand  -- The country's first supermarket bank is getting resistance from the four largest banks as it makes its first move into transaction-based banking, according to a report in the New Zealand Herald.

Superbank, a joint venture between Australia's St George Bank and Foodstuffs, opened in February offering just a savings account. However, it recently added a checking account with an ATM card.

Superbank had to negotiate with the big four banks -- Australia and New Zealand Banking Group (ANZ), Bank of New Zealand (BNZ), National Bank and Westpac -- to gain access to their ATM networks. According to the Heraldreport, one flatly refused, another took some time to agree and the others imposed significant fees.

"We don't have any ATMs of our own, so we don't have any bargaining power at the moment. It's been interesting," said Chief Operating Officer James Munro, who declined to reveal how many customers have opened Superbank accounts.

Superbank customers will be charged a $1 fee each time they use another bank's ATM. Munro said customers would be encouraged to draw money from their accounts through point-of-sale terminals in Foodstuffs' supermarkets as an alternative.

Apart from the ATM charge, the new SuperAccess account is competitive on fees, according to the Heraldreport, with a flat monthly base fee of $7.99 on accounts with a balance higher than $1,000 or $10.99 for accounts with less.

Superbank customers also can conduct banking business via a call center and Web site.

Munro said that Superbank would evolve from what he called a "banklet" to a full-service financial institution in two to three years.

"We haven't been like other new entrants who have offered a full range of products in one go," he said. "Now we have an account with a much broader focus. It doesn't make us full-service yet, but it will be a different story."

Superbank hopes to follow in the footsteps of successful British supermarket banking chains Tesco and Sainsburys.

As part of Superbank's evolution into a full-service bank, it will need to have a presence in Foodstuffs' stores, which include the New World and Pak'N Save chains, said Munro.

He stopped short of saying there would be in-store branches, but hinted that ATMs could be installed in stores. Foodstuffs already has 73 ATMs in its stores -- but they belong to other banks.

Munro said the bank should become profitable in its third year.