Is it Tyme for a banking change?


TymeBank had its official launch, although it has already signed up more than 80 000 customers.

As South Africa’s first fully digital bank, it is what the industry calls a “digital disruptor”.

Its only physical presence is at kiosks at Pick n Pay and Boxer stores where you can open an account and make cash deposits or withdrawals at tills.

The rest of your banking is done with a card and the internet.

One of the key elements of a digital disruptor is that it drives down costs as it has no legacy systems or expensive branch networks to maintain.

TymeBank has no monthly fees and many everyday banking transactions are free, such as card swipes and cash withdrawals at Pick n Pay or Boxer tills.

You pay R4 to deposit cash at a till and R2 for an electronic funds transfer or debit order. Based on my personal banking behaviour my bank fees would be about R22 a month.

Probably the most innovative feature of TymeBank is that you can open an account with just your fingerprint. No ID documents or utility bills are required.

TymeBank’s ID verification system is linked directly to Home Affairs and it uses information from the consumer profile bureau to confirm your address.

Responses on social media by TymeBank customers confirm that it takes only five minutes to receive your bank card. Some have, however, complained about support services.

Cheslyn Jacobs, TymeBank’s head of sales and service, acknowledged that the bank client acquisition strategy has been more successful than expected, creating some teething problems.

“We are ahead of where we expected to be with new customers; the aim of the soft launch was to identify and deal with the technical issues,” she said.

It is increasing the number of TymeBank “ambassadors” (support staff). As part of an initiative to reduce youth unemployment in South Africa, TymeBank ambassadors are sourced from previously unemployed youth between the ages of 19 to 29.

Based on social media responses, the big attraction appears to be the high interest rates with many customers saying they are using the bank for their saving goals.

Customers can create and name up to 10 different saving goals and transfer funds from their Everyday account into a GoalSave in seconds.

They earn as much as 6% interest from the day they start saving, 7% after 30 days and 9% after 90 days.

After 90 days, if customers give 10 days’ notice, they can earn as much as 10% interest a year on their savings.

While Jacobs says this decision to reward the length of time you invest for is part of the bank’s drive to create a savings culture; it is also the strategy of most banks to increase deposits over 30 days.

Any deposits of over 30 days are considered of higher quality in terms of the Basel III banking requirements.

Unlike Capitec which charges a monthly fee of R5 but then pays a relatively high interest rate for their transactional account, Tyme has no monthly fees but a zero-interest rate.

You have to transfer your funds into a GoalSave account to make your money work for you.

The challenge for TymeBank is going to be converting those new customers into using the bank as their primary account, not just for saving.

Many people are happy to open a new bank account to test it out, but they generally keep their existing transactional account until they are fully convinced to make the switch.

The retailer-linked bank has been tried before when more than 15 years ago Nedbank opened its Go Banking account in conjunction with Pick n Pay.

Despite being the cheapest bank account in the country by a long way, the initiative topped out at 90 000 customers.

Jacobs believes TymeBank is a very different offering. First, it has no revenue streams to protect – effectively Go Banking was a competitor to Nedbank’s existing banking options.

Second, technology has moved a long way since then with banking apps making it far easier to run a digital bank without the need for branches.

They have fully integrated with the Pick n Pay Smart Shopper programme. The TymeBank card doubles up as a Pick n Pay Smart Shopper card.

This means that TymeBank customers earn Smart Shopper points everywhere they shop, not just in Pick n Pay.

TymeBank customers also earn double Smart Shopper points when using their card to swipe and pay in a Pick n Pay store and they receive one point for every R3 spent at other retailers.

Jacobs says the next roll-out will be in simple lending products.

They will be using alternative data streams to assess risk rather than the traditional models used by the banks.

This will include shopping behaviour collected with the Smart Shopper data.


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