TymeBank, owned by South African billionaire Patrice Motsepe, has started signing up customers for its new online bank, one of a number of entrants planning to steal clients away from traditional lenders such as Standard Bank Group Ltd. and Absa Group Ltd.
The Johannesburg-based company has signed up 1,800 clients in the first week of an unofficial launch, Chief Executive Officer Sandile Shabalala said in an interview in the city on Friday. The official opening is scheduled for the end of the first quarter next year, he said.
TymeBank, controlled by Motsepe’s investment vehicle African Rainbow Capital Investments Ltd., joins at least two other companies seeking to challenge the country’s top five lenders through digital business models. Discovery Ltd., the nation’s largest health-insurance administrator, has said it plans to introduce its banking unit to the public next week.
Tyme’s account does not charge a basic monthly fee. Instead clients pay for specific services as they use them, with the most expensive transaction in its fee structure, cash withdrawals at ATMs of other banks, costing R8 rand.
“People normally don’t understand bank charges, but this is simple to understand. There are no hidden fees,” Shabalala said. “What we are driving to the market is transparency.” The bank isn’t targeting a specific segment of the market, he said.
Clients will be able to download Tyme’s mobile app for free at any of its 730 self-service kiosks, located in outlets of retailer Pick n Pay Stores Ltd. The bank also pays for data costs related to the app, Shabalala said.
“The next step in the journey, obviously, is to get into the lending space and we want to take our time around that,” Shabalala said. “We don’t have existing customers and first want to understand the profiles of the customers we want to lend to” by offering them transactional accounts, he said.
While the Prudential Authority of the South African Reserve Bank, which oversees the industry, may not have traditionally allowed a bank to operate solely online, it has permitted Tyme to move ahead with its plans, Shabalala said.
“Traditionally they would not even have considered for a bank to put its core banking platform on the cloud, that was a definite no-no,” he said. “But we are the first bank” to be able to do it in South Africa.