Barely two years since it was launched in February 2019, South Africa’s TymeBank is ready for fierce competition with traditional banks. The country’s first digital bank has announced it had recently surpassed the 3 million customer mark, onboarding between 100,000 and 120,000 new customers per month.
“Financial institutions need to be responsive to consumer preferences. Banking customers are sensitive to costs impacting adversely on their financial health, particularly in these tough times. They also want to know exactly what they’re paying for and TymeBank’s simple, transparent, affordable banking offering is giving our 3 million customers what they want and need,” says CEO Tauriq Keeran regarding the recent milestone.
“With our focus on lower transaction costs and giving value to our customers, we can proudly say that we have enabled 100 million free transactions to date, which is timely given the current climate. This, plus the fact that we have never asked a customer to complete any paperwork, saves our customers money and makes their banking experience quick and convenient, right from the start,” he adds.
Here Is What You Need To Know
- According to TymeBank, although the pace at which a customer can sign up is part of its fast onboarding process, the digital bank also attributes its huge adoption to the fact that it has no monthly banking fees and transaction costs that are 30 to 50 percent lower than those charged by other institutions.
- With a customer base of more than 3 million acquired within a space of two years, TymeBank’s massive adoption rate in South Africa is unprecedented. As at June 2018, South African bank Capitec with 10.2 million customers topped the country’s entire banking industry in terms of number of active customers. This was followed by FNB at 8.15 million and the country’s largest bank by assets, Standard Bank at 8.12 million (this is despite the fact that Standard Bank, for instance, has been in existence since 1862).
- The bank recently raised $110m from private equity fund Apis Partners, with participation from JG Summit.
A Look At What TymeBank Does
Launched in 2019 by founders Coen Jonker, Rolf Eichweber, Tjaart van der Waalt, TymeBank is South Africa’s first digital bank. In February 2019, the bank launched its EveryDay transactional account bundled with a savings tool called GoalSave, its MoneyTransfer solution, and its TymeCoach App, which gives consumers free access to their credit report, supported by tips on how to make better decisions about the money.
Essentially, below are what the TymeBank product is bringing to the table:
The Bank Is Relying On Partnership As Its Strength Both For Money Deposit Or Withdrawal
TymeBank has created a network of partners including Pick n Pay and Boxer, with the former’s Smart Shopper program now fully embedded into TymeBank’s technology stack.
“We’ve partnered with companies whose business ethos aligns with what we want to do in the market, which is to do good. The customer will always be at the centre of our banking practices and going forward we will be doing some really exciting things with our partners, it will go way beyond just occupying floor space,” said Sandile Shabalala, TymeBank’s CEO who resigned in June, 2019.
The implication of joining forces with Pick n Pay and Boxer stores is that TymeBank now has access to a relatively significant distribution edge.
South Africa’s data-only mobile network Rain had also entered into a partnership deal with Tymebank to test the distribution of its SIM cards at Tyme kiosks, making it easier for its clients to sign up for a new service.
TymeBank’s Strategy Is Also To Make It Simple and Cheap For Customers
Indeed, signing up to the digital bank could cost little or nothing. No documents are required and no charges demanded.
To open an account, you need a South African ID number and a South African cellphone number, which the bank verifies through several questions and a One-Time PIN (OTP).
If the process is done at a kiosk, biometric data will be captured and compared to the data with Home Affairs, which is connected to the Tyme systems, and a free Visa debit card is issued immediately.
If done online, you will have access to your account, but it will be limited in how much you can transact until you go to a kiosk and “upgrade” your account (for free) to a full account through capturing biometric data and registering your residential address.
Getting a debit card is free and immediately.
Service Fee for new registration is free. There is no monthly account or withdrawal at Pick n Pay and Boxer stores, only R2 at other major retailers.
By July 2019, Customers Could Borrow From TymeBank Without Collateral
The digital bank also started piloting its unsecured term lending in July, 2019 and a credit card in partnership with consumer lending company RCS later in 2019. However, the Covid-19 pandemic and associated lockdowns put paid to the bank’s original plan to launch a standard unsecured lending product to customers in 2020
Instead, it has recently launched MoreTyme, a product which offers “interest-free shopping”, with customers paying half the price at the till point of partner retailers and the rest in two equal instalments over two months.
Up Next
TymeBank seems to be moving forward with its process by introducing new items to its existing portfolio.
“While our technology allows for exponential customer growth, our priority is to broaden our offering to include innovative credit and insurance products plus a variety of value-added services. We want to continue broadening access to banking for the benefit of the country’s consumers,” concludes Keraan.
Read also:Mauritius Sets Up Committee To Clear Way For Fintech Startups
The company’s recent growth has been remarkable, but with larger financial institutions pushing digital agendas as well, it will be important to see how long TymeBank will keep up this pace.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer
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