Motsepe’s bank signing clients

TymeBank, owned by 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 and Absa Group.

The company signed up 1 800 clients in the first week of an unofficial launch, CEO Sandile Shabalala said 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, joins at least two other companies seeking to challenge the top five lenders through digital business models. Discovery, the nation’s largest health-insurance administrator, has said it plans to introduce its banking unit to the public next week.

Tyme does not charge a basic monthly account fee. Instead clients pay for services as they use them, with the most expensive transaction being cash withdrawals at the ATMs of other banks, costing R8. “There are no hidden fees,” Shabalala said. “What we are driving is transparency.”

The bank isn’t targeting a specific segment of the market, he said. Clients can download Tyme’s mobile app for free at any of its 730 self-service kiosks in outlets of Pick n Pay. 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.

While the Prudential Authority of the 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, he said.

“Traditionally they would not even have considered a bank putting its core banking platform on the cloud. That was a definite nono,” he said. “But we are the first bank” to be able to do it in SA. – Bloomberg

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There are no hidden fees. What we are driving is transparency.

Sandile Shabalala TymeBank CEO