Tymebank targets entry-level market with lower fees

Tymebank says it has reached a “comfortable” footfall of five new customers a day in about 500 of its live kiosks in Pick n Pay and Boxer Stores across the country.

The digital bank, owned by Patrice Motsepe’s African Rainmbow Capital (ARC) expects to break even in 2022 if it can  attract 2.1-million transactional banking customers and lend to at least 6% of that base.

“We know that we need scale. We need to on-board as many customers as soon as possible and ensure they transact as much as possible,” said Tymebank’s deputy CEO, Tauriq Keraan.

The new  player in the retail banking space was fully launched two weeks ago following a low-key market entry in November last year. It said it now has just more than 80,000 transactional banking customers and about 500,000 registered money-transfer users. Tymebank is targeting individuals in the entry-level and middle-income bands, looking at 21-million potential customers, of which 17-million are underserved by traditional banks. It is also targeting small- and medium-sized enterprises (SMEs). 

“There’s a big job to be done in the underserved communities at the entry level of banking. We also believe there’s a bigger opportunity in this country to engage SMEs in a much more effective way,” said Tymebank CEO Sandile Shabalala.

The focus on the entry-level market will bring Tymebank  into direct competition with Capitec, whose customer base surpassed 10-million in 2018. The bank will also directly compete with African Bank which is set to launch a fully-fledged transactional banking offering to this market in April.

Said ARC co-CEO Johan van Zyl, “We are going to compete against all the mass foundation offerings of Absa, FNB, Standard Bank and Capitec. Capitec seems to be a winner in some cases —  but now we come and halve the cost. But the trick is not to just beat the existing banks, what we want is for people who cannot afford banking to take up banking.” 

buthelezil@businesslive.co.za