Nine out of ten Brazilians believe banks charge abusive fees
The rates vary, but the effect is felt on all account holders at the end of each month.
It doesn’t matter what your income level is, if you currently have an account with a conventional Brazilian bank there’s only one constant: bank fees.
Whether making a withdrawal, transferring money, or using your account in general, banks that operate in the traditional fashion package their services in a bundle that includes operating fees. The average rate among the 14 most popular Brazilian banks is $27.64 reais, or $6.66 USD, which adds up to approximately $331.68 reais per year, or $79.89 USD.
“When we look at just the monthly fee we Brazilians pay, it’s not obvious how abusive it is. However, once we calculate the total expense for the year, it’s shocking. How many essential things could be bought with this money?” asks Gustavo Ribeiro, president of Airfox in Brazil.
A survey devised by Airfox in partnership with Toluna, a leading provider of on-demand consumer insights, asked consumers about the current opinions regarding the fees charged by traditional banks in Brazil. Gathering insights from more than 1,000 people, the survey results highlight how frustrated people are to see their hard-earned money disappear into the bank’s hands.
The research study was carried out on June 12, 2019 with a sample size of 1,050 people from Brazilian A, B, and C social classes. The social classes are determined according to the classification criterion used by ABEP, Brazilian Association of Research Companies, where persons of class C2 have a mean household income of R$1,625 per month.
Among those interviewed by the study, 89% believe traditional banks charge account holders abusive fees, compared with only 11% of those surveyed who think the amount account holders are charged is correct. Full results from the survey can be found here.
But what does this mean for those with bank accounts in Brazil? To give you an idea of the significance of the money that account holders are losing, we have gathered a list of equivalent expenses that occur in everyday Brazilian life.
Purchases in Brazil equal to average banking fees
Travel. According to the airline company Skyscanner, Brazilians can buy (with advance notice) tickets from São Paulo to Belém or Recife, in the Northern region of Brazil, with the amount of money they are spending on bank fees a month. Purchasing tickets to these locations would cost them R$33 less than what they spend on average fees.
Food. For the amount spent on banking fees each month, it is possible to buy a Big Mac at McDonald’s for R$27.50, or a combo meal in São Paulo for R$24.00. With the annual savings it is possible to buy a basic food basket, a common Brazilian gift basket filled with non-perishables and traditional food items, for R$328.70.
Beauty. With what you would save in a year without paying fees, it’s possible to buy deodorant for R$129.90 and an Elysée Eau de Parfum 50ml R$219.90. After purchasing both products you would still have change left over.
Transport. For those who use public transportation, the money they’d save if they didn’t pay annual bank fees would equal 51 trips by bus or subway in São Paulo, which is almost a month of trips around the city. Those who travel by car could afford 75 more liters, or 20.3 gallons, of gasoline based on the current national average price.
Recreation. What hobbies are Brazilians losing out on when they have to save to pay their bank fees? For those who live near the coast, this money could mean more trips to their local beach. For others this money could mean a trip to the movies, usually costing an average of R$15.00.
Savings. If R$331.68 was put into a savings account, after a year it would yield R$24.69, which demonstrates how if account holders saved the money they are currently spending on fees, their personal savings would grow significantly over time.
A new way to bank
What would you choose: Pay a bank simply because you need access to your hard-earned money? Or, use your money how you want to without excessive fees? The answer is obvious.
Airfox is on a mission to accelerate financial inclusion for the underbanked within emerging economies. When it comes to extremely high banking fees that force Brazilians to choose between paying their bank or paying for everyday things like food or transportation, Airfox’s digital banking service banQi offers an alternative option.
To learn more about the future of humanized digital banking, visit the Airfox website.