Patrice Motsepe-backed TymeBank says its partnership with fashion retailer TFG has almost doubled its physical presence, putting it in a prime position to take on SA’s so-called big five retail banking groups.
The digitally focused lender, which is also expanding in the Philippines under the GOTyme banner, has completed its rollout of 600 kiosks across TFG stores in SA. The two groups have now issued 250,000 jointly branded debit cards.
Together with its roughly 750 kiosks, mostly at Pick n Pay and Boxer stores, and a further 100 available through the Zion Christian Church (ZCC), TymeBank now has a physical presence at 1,450 venues across SA.
“That is a network that … rivals the networks of the big banks,” says CEO and co-founder Coen Jonker. “In February we’ll be four years old and in our first four years we’ve grown faster than the leading emerging market digital bank in the world, being New Bank from Brazil.”
TymeBank’s physical kiosk presence is more than twice the size of FNB’s 611 branches and close to double Capitec’s 856-branch network, catapulting it into a competitive position alongside SA’s two most-popular lenders.
Jonker says that it allows TymeBank to provide customers with a “new front door” to access banking services, something that encapsulates the embedded finance strategy he believes is the future of retail banking.
“What we mean by embedded finance is that we’re no longer asking customers to come to the bank, we’re bringing the bank to the customers,” says Jonker. “We really believe that a bank that is able to come to you as opposed to you having to go to the bank is the future.”
Jonker says about 80% of TymeBank’s 6.2-million SA customers joined the bank at its kiosks rather than through digital options such as its app or internet banking platform. Every in-store TymeBank kiosk also has an assistant to help customers open an account or access other financial services.
“These kiosks do everything that the sales and service function does in a branch — that’s why we think we can equate a kiosk to a branch,” says Jonker. “Even in a world where people are becoming more digitally savvy, people in SA still prefer opening a bank account in a physical environment.”
One of the big advantages of partnering with TFG, which has almost 3,000 stores across SA and makes it the biggest clothing retailer in the country, is the vast data pool it provides from its almost 30-million reward programme members. Together with data from Pick n Pay stores, that allows TymeBank to better assess credit risk, fraud prevention and general customer behaviour such as their propensity to repay loans.
Expansion options
TymeBank’s rapid growth in SA also comes at an opportune time since the lender shelved plans to expand in Pakistan due to challenges in obtaining a digital banking licence there. It will now look at markets such as Vietnam and Indonesia as part of its Southeast Asia expansion plans.
But what’s the appeal of the TymeBank partnership for TFG? Scott Brown, MD of value-added services and mobile at the retail group, says TFG’s research shows TymeBank enjoys strong trust among its clients and also has a solid tech stack to support the rollout of financial services.
The initial five-year agreement, which makes TFG the exclusive apparel partner of TymeBank, also allows the retail giant to leverage its floor space to provide a financial services offering without having to apply for a banking licence.
Asked if TFG is considering buying TymeBank, Brown was non-committal. “We’re not a bank. We’re not looking at getting our own banking licence, which is one of the reasons we opted to partner.”
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