TymeBank signs up 4 000 new customers per day

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Digital bank TymeBank has revealed it now has 700 000 active bank accounts and the bank is signing up to 4 000 customers per day.

For the six months ended 31 December 2019, the bank received R500 million in deposits and it also launched an unsecured loan product for retail clients.

At the end of December, the bank had cumulatively signed up 1.1 million customers, of whom 440 000 were actively using their accounts. This had ballooned by 28 February to 1.4 million clients, about 700 000 of whom had active bank accounts.

The bank defines an active customer as someone who has a positive account balance, and/or initiated at least one transaction in the preceding 30 days.

The bank says it is well-positioned within the South African banking sector to implement its “unique” low-cost banking fee model, as well as customer experience value propositions.

TymeBank is majority owned by African Rainbow Capital (ARC), the empowerment investment holding company owned by business mogul Dr Patrice Motsepe. It made its debut via a soft launch in November 2018, becoming publicly available in February last year.

The digital bank leverages the use of digital biometric technology to simplify banking and is focused on banking the unbanked in South Africa.

In the six months to December, ARC FinHoldCo says it invested R300 million, with R150 million contributed from the ARC Fund.

Last month, the bank announced a partnership with the Zionist Christian Church (ZCC), which it says will lead to the bank signing up members of the church’s 12 million-strong congregation.

Some nine million of those members are based in SA; approximately six million of whom are adults. About four million members make the annual pilgrimage to Moria in Limpopo every April, although the church has cancelled all Moria events this year due to COVID-19.

In terms of the partnership, ZCC members will be offered an opportunity to take up a Zion City Moria membership card, which will serve as both a membership and bank card.

Boom time for digital banks

In the past year, SA has seen some shake-ups in the retail banking industry, with digital banks such as TymeBank, Bank Zero and Discovery Bank vying for new customers.

Insurer Discovery unveiled what it describes as the “world's first behavioural bank”, a fully digital bank that anyone with a smartphone can join.

Equally, Bank Zero in November said it will launch public operations in the first half of 2020, following its announcement that it had gone live with its debit card.

The bank is entirely app-driven on smartphones, and at the time, Bank Zero said in preparation for the card go-live, rigorous health-checks such as simulated card attacks, card fraud detection and retailer readiness were under way.

Upon their arrival, digital banks have had an impact on the banking sector, which in some cases has seen fees tumbling or new affordable products being launched.

Since TymeBank went live, Capitec shaved 50c off its Global One account’s monthly fees. Nedbank followed suit, cutting the monthly account fee on its pay-as-you-use account in April.

In June last year, Nedbank rolled out Unlock.Me, a zero-fee digital product aimed at customers younger than 25. In November last year, Nedbank launched a no-fee mobile wallet account, MobiMoney.

In May 2019, Standard Bank unveiled its MyMo account, which carries a monthly fee of R4.95, undercutting Capitec’s Global One by 5c.

All clear for Rain

Turning to its investment in new mobile network data provider Rain, ARC says the data network’s business objective is to become a full-spectrum mobile network operator focused on providing data to consumers and businesses.

ARC Investments has a shareholding of 20.7% (valued at R2.7 billion) in Rain.

Rain’s key assets are spectrum licences. It has an allocation in the 1 800MHz band, as well as an allocation in the sought-after 2 600MHz band.

According to ARC, the network has already established a 4G LTE network with over 3 000 active LTE sites.

Rain activated Africa’s first commercial 5G network in September. The mobile data-only network deployed its 5G wireless network in certain parts of Johannesburg and Tshwane by leveraging its 4G data networking infrastructure to build the 5G network in its regulated 3 600MHz spectrum band.

Commenting on the company’s performance for the period under review, Dr Johan van Zyl, co-CEO of ARC, says: “As previously communicated to the market, our performance as an investment holding company depends on how well our underlying investee companies perform as we are mostly a significant minority shareholder in their businesses.

“Although we regard our portfolio as satisfactorily diverse which spans several sectors of the economy, pedestrian economic growth adversely impacted many of our investee companies. Our overall performance was also impacted by the poor performance of some of the listed entities in our portfolio.”

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