Tymebank (Reuters)
Tymebank, the new kid on the banking block, is pitching its fees so low that one wonders how it will make money.
For instance, it does not charge for withdrawals and incumbent banks charge between R2.50 and R6.50 for this service.
Its chief executive, Sandile Shabalala, claims Tymebank is “50% cheaper than any bank out there”.
Owned by African Rainbow Capital (ARC), a company in Patrice Motsepe’s Ubuntu-Botho Investments stable, the bank aims to disrupt the sector by offering cheaper banking combined with the use of data analytics and customer education to build up its base.
It says it is targeting the underbanked.
Tymebank had its official launch this week, after a soft launch last November.
The bank appears to be getting customers; it says it has already notched up 80 000 and took R10-million in deposits on a single day this week.
Tymebank compares its costs with other banks based on Solidarity’s 2018 banking report, which
compares a bundle of 17 transactions. Tymebank was not in operation when the report was done.
It says its fees are the cheapest at R32. FNB’s Easy Bundle account, at R72.20, is the most expensive. Standard Bank’s Access account charges R60.36 and Capitec R47.50.
Unlike traditional banks, Tymebank does not have physical branches. Instead, it has forged a “strategic partnership” with Pick n Pay and Boxer for 10 years, which will allow customers to withdraw money free of charge and only pay R4 to make a deposit at more than 14 000 till points and at more than 1 500 stores. Withdrawals from other large retailers cost R2, and R8 from ATMs.
The bank uses kiosks at 500 Pick n Pay and Boxer stores, where clients are able to set up their accounts with Fica accreditation. It says the process takes just five minutes. People can transfer money at these kiosks although they are not ATMs.
Most Tymebank transactions happen at the store till using a banking app (only available for Android users) or online.
Tymebank targets savers with its GoalSave account, which offers a maximum of 10% interest after 91 days of use.
“The GoalSave pocket is encouraging a savings culture,” says Shabalala.
The bank sees customer education as key. “At the core of our business is financial education. Our application, Time Coach, which can be downloaded on both Android and iOS phones, teaches people on how to manage their finances,” he says.
“It not only gives your credit score but tips on how to improve your credit and to get your score up.”
It will pilot plans to offer loans in the second half of the year. “It’s well known that banks start to make money when they are lending, so we need to offer a credit product.”
Tshegofatso Mathe is an Adamela Trust journalist at the M&G