TymeBank is the first bank to be issued a new banking license by the South African Reserve Bank since 1999. Mohamed Dabo reports on a newcomer that is turning South African banking on its head.
TymeBank burst onto the scene with the magic word ‘free’: free everyday transactions and ‘free’ (i.e., no) monthly charges.
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By GlobalData‘Very low’ charges for other transactions. Discounts and rewards galore for their debit card users at partner retailers.
The neobanks made it possible for customers to open a bank account in less than 5 minutes and get their cards issued instantaneously from a TymeBank kiosk.
As the first digital challenger bank in South Africa, TymeBank offers some unique services to their clients. The bank is servicing its clients through self-service channels, as it has no bank branches.
Bank customers on-board via kiosks which are located at retail stores nationally and clients can perform a quick and easy KYC process based on their South African ID, biometrics and mobile phone number.
In addition to opening an account, customers can apply for a debit card, which is issued to them instantaneously at the kiosk.
“We aim to disrupt the local banking industry”
By offering ‘a pure digital banking experience’ to its customers, TymeBank aims for nothing less than ‘to disrupt the local banking industry’.
Building a new bank is a significant undertaking and getting to the point of complying with stringent South African banking regulations and PCI DSS required careful planning and analysis, was no mean feat.
With requirements from stakeholders across South Africa, Australia, Vietnam, Hong Kong and the Russian Federation, continuous follow up and prioritisation were key during project implementation.
The bank uses a card UID (unique ID) number to replace the PAN (primary account number) in all transaction messages to the bank’s IT systems such as the core banking system, allowing those systems to be hosted in non-PCI DSS compliant environments.
A partner that is equal to the challenge
TymeBank scrambled to look for reliable and experienced payment partners who could commit to this epic journey.
After ‘a rigorous vendor selection process,’ it found it in BPC Banking Technologies, a Switzerland-based payment company that delivers the full range of digital banking services through its SmartVista product suite.
The partners say BPC has proved to be the collaborator TymeBank needed for building a new bank from the ground up.
BPC implemented SmartVista as the interoperable payments solution that seamlessly integrates to the bank’s unique and innovative kiosk channel.
The solution includes (instant) debit card issuing, acquiring and fraud management.
By using a phased approach, TymeBank initially went live with debit card issuing in the final quarter of 2018 and will be adding additional capabilities such as acquiring and ACS for online payments in a next stage.
BPC’s vast payments industry experience was a major contributing factor to the successful bank launch.
Both the remote and on-site BPC project resources immediately supported the bank with any queries related to the SmartVista modules, networking issues, the HSM’s, cryptography, card manufacturing, payment transaction flows and international payment scheme certification for card issuing.
Working in a true partnership model, TymeBank and BPC managed to build an entire banking infrastructure from the ground up to support TymeBank’s ambitions to deliver a unique low-cost innovative service to their clients.
Navigating covid-challenges
With 1.6 million customers and 850 000 active accounts and counting, TymeBank’s growth in the first year of its launch surpassed its own projections.
The onset of the coronavirus pandemic slowdown the bank’s fast pace of new customer acquisition, which dropped by 20% in April.
Nonetheless, with people stuck at home, on account of covid-19 lockdowns, the digital bank saw average balances per active customer increase 25% and send money transactions climb 20%.
“It’s quite difficult with what’s happening now in the market, because we have an unprecedented health crisis which has led to people’s movements being severely restricted. But not withstanding that, we’ve seen certain transactions shoot up,” said CEO Tauriq Keraan.
Keraan said TymeBank, which saw value-added services like airtime and electricity sales shoot up 50% in April, will now be aggressively promoting online registration of new bank accounts.
The bank, which is wholly owned by billionaire Patrice Motsepe’s African Rainbow Capital, does not have any banking branches, relying solely on digital means (online, mobile, or kiosks).
A few weeks ago, TymeBank said it was considering ditching an expansion into unsecured loans due to the coronavirus crisis.
“The bank is considering alternative credit products which do not carry the same longer-term risk as an unsecured loan,” ARC said in a stock market update.
Many observers see this as a wise move, as TymeBank’s low-cost model targets lower-income consumers.
