TymeBank says it’s 50% cheaper than the cheapest
Customers pay an average of R10 a month in banking fees
Tyme customers have the option of adding up to 10 interest-bearing savings pockets to their accounts, at no cost.
Tymebank, South Africa’s first fully digital bank, says its Everyday account is 50% cheaper than the bank account rated the cheapest in the 2018 Solidarity Bank Charges report, a popular comparative survey of the transactional bank accounts offered by six South African banks.
Cheslyn Jacobs, the head of sales and service at TymeBank, says its account beat the winner in the category of 12 to 17 transactions – which is the low-income user profile – coming in “almost 50% cheaper than the market leader”.
Solidarity’s comparisons are based on predetermined user profiles with a set number of transactions in a month rather than the income of the user.
The average monthly fees incurred by customers is R10, Jacobs says. “This drops to R7.50 when you take account of interest paid on savings, which will increase over time.”
Tyme customers have the option of adding up to 10 interest-bearing savings pockets to their accounts, at no cost. The bank calls them GoalSave pockets and pays interest of 6% a year for deposits held for up to 30 days, 7% a year for deposits held for 31 to 90 days, and 9% for deposits held for 91 days and longer.
Interest on the money in each GoalSave pocket is calculated daily, on the balance at the end of the day, and at the interest rate for that day. The daily interest builds up during the month and is added to the balance in the GoalSave account on the first day of the next month. Interest compounds monthly.
While you have instant access to the funds, you may not transact from your savings accounts by, for example, paying a beneficiary out of your savings account. Instead, you have to transfer all of the money in the savings pocket to your transactional account – you can’t make piecemeal withdrawals – and start saving again from scratch.
TymeBank customers can earn double the Smart Shopper points when paying with their TymeBank card at any Pick n Pay till.
Tyme announced today that it has attracted 80,000 account holders and rolled out 579 kiosks countrywide since its launch in November last year.
To give that some context, Capitec had more than 266,000 new clients join the bank in January of this year, the highest single-month uptake to date, according to the bank.
Sweetening the deal for Tyme customers, the bank has partnered with Pick n Pay’s popular loyalty programme, whereby TymeBank customers earn double the Smart Shopper points (in other words, one point for every R1 spent) when paying with their TymeBank card at any Pick n Pay till.
These bonus points are loaded monthly and customers are notified by TymeBank how many points they’ve accumulated through their TymeBank swipes. The points can be redeemed directly at a Pick n Pay till.
Jacobs says 1.2 million Smart Shopper points have been awarded to TymeBank customers to date.
While most TymeBank customers (66%) are aged 26 to 45, Jacobs says the bank has been surprised that a relatively high 19% of customers are aged 46 to 65. “The youngest in that age bracket would have been in a relationship with a bank for the past two decades,” he says. Such customers are considered “digital immigrants” because they were not born into a tech-saturated world as their tech-savvy younger counterparts were. So-called “digital natives” are more comfortable with technology than older customers.
Jacobs says the bank’s ability to attract a high number of older customers shows how easy it is to open an account with Tyme and the willingness of consumers “to engage a kiosk” which they need to do to get their bank cards, since the bank has no branch network and no ATMs. Customers can withdraw and deposit cash from more than 10,000 Pick n Pay and Boxer outlets countrywide.
The banks kiosks are inside Pick n Pay and Boxer stores countrywide, and Tyme plans to have more than 700 by the end of April, Jacobs says.
At a kiosk you can open an account in five minutes and get a customised card. The bank uses biometric data from the Department of Home Affairs to verify your identity.
Most of the bank’s customers (37%) are situated in Gauteng, 15% are in KwaZulu-Natal and 10% are in the Western Cape. This mirrors the footprint of Pick n Pay and Boxer, Jacobs says. While only 18% of customers registered online, he says the bank expects this number to grow steadily over time.
Only 30% of people who have opened accounts are using them, and the bank can’t say yet how many customers are using the account as their primary bank account.
Jacobs says the bank’s “big job” is to build trust, and that the biggest question asked of its “ambassadors” (who man the kiosks) is: where do I go when the proverbial pawpaw hits the fan? People want the comfort of a physical branch when technology fails them.
He uses the example of typical airline passenger who has booked and paid for their flight online and yet avoids the self-service check-in kiosk because they would rather deal with a person.