Sandile Shabalala: New bank on the block. Picture: FREDDY MAVUNDA
Sandile Shabalala: New bank on the block. Picture: FREDDY MAVUNDA

Patrice Motsepe’s TymeBank hopes to disrupt the sector with the country’s first offering that can be operated at virtually no cost to the customer.

The bank is in the process of rolling out its offering to all 720 kiosks located at its partner Pick n Pay and Boxer stores, with
the process expected to be completed in the next six to
eight weeks.

The account has no monthly or mandatory fees. Clients can open an account, receive a debit card and pay for items with it, as well as withdraw money from Pick n Pay and Boxer stores all free of charge.

Other functions, such as debit orders or online payments to other banks, cost just R2 per transaction.

The bank has a fully enabled online offering and for Android phone users there is an app.

"We are a fully fledged bank and we want to disrupt the market. We think this proposition is very attractive for all customers, so we are not specifically targeting one segment," said TymeBank CEO Sandile Shabalala.

The offering could force competitors to significantly lower fees, as the prospect of a fully functional offering for as little as R10 a month is competitive, even by low-cost leader Capitec’s standards.

The level of potential disruption can be seen in how much money the country’s largest banks make from transactional fees. In Capitec’s case, 40% of its net income in 2018 came from transactional fees.

The entry of TymeBank and others, including Bank Zero and Discovery, is expected by the regulator to usher in a new wave of disruption that will increase competition in SA’s estimated R40bn transactional banking industry.

The face of the bank is its kiosks, which are standalone ATM-like machines (they do not dispense or accept cash) that act as points of origination.

The innovation brought by TymeBank means customers do not need to supply any documentation in the account opening process.

In a matter of minutes at the kiosk a client can open an account, complete authentication and receive a debit card by providing their identity numbers and fingerprints. While the transactional bank account does not pay interest, customers can open up to 10 GoalSave accounts that are linked to the primary account. (There is no charge to do so). These savings accounts pay 6% interest per annum from day one, which can rise to as much as 10% if the money is left for more than 90 days on 10 days’ notice.

Shabalala said the low fees were made possible through a core banking system that was bought off-the-shelf and which exists in the cloud.

"We pushed the envelope with the regulator, but they were very progressive in getting their heads around regulating a cloud-based banking platform," Shabalala said.

He said the next product on the horizon would be a short-term personal lending product.