Update July 2020: BNZ to phase out Cheques

Update June 2020: Kiwibank changes credit card provider

Original Post Jan 2019:   NFP Resource recently received an enquiry relating to the fees that NZ banks charge non-profits and whether any still offer fees-free accounts. Our research indicated that there is a tremendous variety in what banks may (OR MAY NOT!) offer to clubs/non-profits and we found that the banks’ websites are not always helpful!

Accordingly, On 12 December 2018 NFP Resource sent letters to each of the major NZ Banks, and posed the following queries:

Do you offer reduced fees (or nil fees) to non-profit groups?
     If so ….
     To which types of non-profit groups?
     And upon which accounts?
     Are there any specific conditions (eg minimum balance etc.)?
     What information is required for a qualifying non-profit group to open such an account?

Disappointingly we have not received any response from:
ASB Bank
Westpac
BNZ Bank
Heartland
Kiwibank

The responses from the various banks who responded (in the order received) are repeated as follows (we will update the post should other  responses be received):

TSB Bank

TSB has a specific, transactional account type which is designed to be used by not-for-profit groups. There are no transaction fees on the account, however other service fees may apply. Application forms and ID verification are required for all authorised persons. Please note that we run very limited cash handling services outside of Taranaki. Not-for-profit groups can contact TSB to discuss their options further.

See: https://www.tsb.co.nz/clubs-society 

ANZ Bank

Do you offer reduced fees (or nil fees) to non profit groups?
Yes, we offer a fee-free current account to non-profit organisations

To which types of non-profit groups?
The definition of a non-profit organisation is
any society, association or organisation that:

  • is not carried on for the profit or gain of any member
  • has rules that do not allow money, property or any other benefits to be distributed to any of its members

NPOs can be in the form of a:

  • Trust
  • Incorporated Body or Society
  • Charitable Institution
  • Cultural or special interest group

And upon which accounts?
We have a specific account dedicated to non-profit organisations

Are there specific conditions (eg minimum balance etc.)?

There is no specific balance requirement, the organisation must meet the definitions shown above and supply the information detailed below

What information is required for a qualifying non-profit group to open such an account?

Customers must produce one of the following:

  • Certificate of registration as a charitable entity from the Charities Commission,
  • Certificate of Incorporation issued by the Registrar of Incorporated Societies, or
  • Statuary Declaration of Intention to operate as a Non-Profit Organisation within the definition above.

In addition, we’d require identification documents for us to verify the identities of all signatories/trustee to the account.

Additional information

As well as being fee-free from account and transaction fees the Non-Profit current account also offers:

  • No cheque clearance or cash handling fees
  • Full transactional access with credit interest paid on credit balances
  • Overdraft facilities available provided the rules/constitution of the organisation permit borrowing
Co-operative Bank

At Co-op we provide banking services for everyday New Zealand personal customers.  Unfortunately, our banking services don’t extend to non-profit organisations which require different frameworks and systems to support.

SBS Bank

a. Do you offer reduced fees (or nil fees) to non-profit groups?
Yes, we offer a package which has no transactional account fees

b. To which types of non-profit groups?
Our Star Banking Package is available for Clubs or Societies which must be not for profit organisations supporting an issue or matter of community interest for non-commercial purposes. Such organisations may be involved in a range of areas relating to the arts, charities, education, politics, religion, sport, research or other endeavors.

c. And upon which accounts?
A transactional or working account, a Call account to provide interest income on large amounts of money which might still require immediate access, and a term investment account to provide higher interest where the money will not be required for fixed lengths of time.

d. Are there any specific conditions?
There are no fees, no minimum opening balance and a chance to win one of ten $1000 prizes every month!

e. What information is required for the qualifying non-profit group to open such an account?
1. a) Constitutional document, rules for the Organisations and/or minutes recording persons authorised to act on behalf of the Organisation
b) Address verification also required for the Organisation itself
2. Identification and address verification requirements for individuals associated to this entity
a) President, Secretary, Treasurer, current committee or management team
b) Other person(s) who will operate this account

SBS Bank is focused on helping the communities it operates in. You could say that helping communities is in our DNA, because Southland Building Society was established to strengthen and grow the local community.
SBS Bank recognises the large contribution non-profit organisations play in the community. The bank also wants to recognise the contribution of volunteers in their local communities. The SBS Star package is designed to make it easy for non-profit organisations to operate and to assist these organisations to be financially strong with healthy interest income and a special prize draw.

Contact SBS Bank : 0800 SBSBANK (0800 727 2265)

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In June 2020 we received the following advice from FINZ regarding a credit card change by Kiwibank:

Dear FINZ members,

We have heard from one of our members that Charities have been impacted by Kiwibank changing their credit card companies leaving their customers to update all their payments.  The process began before Christmas and was completed just before lockdown. This process change has negatively impacted donations to charities. It is difficult to determine the true cost in income, but we believe it’s likely to be tens of thousands of dollars. It appears that potentially 50% of card holders are unable to be contacted for new card details regardless of best efforts.

This issue has the potential to cost charities more than the demise of cheques as it affects ongoing regular donations and is potentially ongoing (Westpac did a similar thing a couple of years ago).  Investigations have revealed that, in the US, there is a Card Updater system which the banks can use, like the bank switch system used here for Direct Debits.  Kiwibank knows of this service, but it’s not available here yet.  When/if it does become available, it will likely come at a cost.

We reached out to our contact at Kiwibank and we received the following response:

~

Hi Michelle,
I apologise for the delayed response.
I’m sorry to hear that charities have been impacted by banks changing their credit card companies. We appreciate that the last three months have been a challenging time for our charities with the impact Covid-19 has had on donations. Further to this, other major banks have recently announced that they’ll be going cheque-free within the next year or so.
As part of our move to Visa, we considered whether we could automatically update regular payments on behalf of our customers, as we understood updating payment details would be an inconvenience for customers and also the organisations, they make payments to. In the end, it’s important that customers retain control over any payments coming from their card, so we weren’t able to automate this process.  
For this reason, we sent all impacted customers multiple communications to remind them to update any regular payments before their Mastercard stopped working. These communications referred to a list of the types of payments they should consider, which included payments to charitable organisations.
Even without switching credit card companies, customers need to update their regular payments from time to time e.g. when a card is lost or stolen, or when a card expires (usually every few years). We appreciate keeping donors’ contact details up to date can be difficult, but it’s important that charities aim to do this when they can as card details will continue to change regularly.
Charities may also wish to check in with the e-gateway provider that they use to process the regular payments. They may have other options available to support ongoing payments.
If you have any questions or would like more information, please email or call me. I’d be happy to help.  
Regards,
Brett

Kiwibank

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10 July 2020  BNZ to phase out Cheques

BNZ advise that they are phasing out cheques by July 2021.  Cheque books will not be supplied after 28 August 2020 but cheques can be written and deposited until July 2021.

Source: BNZ