Tymebank CEO Coen Jonker has provided insights into their finances and international expansion plans, and it tells the story of a challenger bank with great prospects.
Tymebank launched in February 2019 with a value proposition based on three pillars – simplicity, transparency, and affordability.
If this sounds familiar, you are right. It closely follows Capitec’s strategy of simplicity and transparency, which helped it to become South Africa’s largest bank by clients.
The strategy also worked well for Tymebank, which signed up 3 million SA customers within the first two years.
By March 2021, Tymebank was signing up between 3,000 and 5,000 new customers daily.
Unlike Capitec, Tymebank has no branches. Instead, it uses 14,000 till points across the Pick n Pay and Boxer network and over 850 kiosks to serve its clients.
A new partnership with The Foschini Group will raise the number of kiosks to 1,450, giving it one of the largest banking access point networks in South Africa.
The kiosks are a hit. 80% of Tymebank accounts have been opened at kiosks, while 20% are opened online.
Tymebank CEO Coen Jonker recently updated investors about their performance, and Tymebank continues to show impressive growth.
It now has close to 5 million clients and increased its suite of services and reach across the country.
Tymebank has also launched a digital bank in the Philippines under the name GoTyme in partnership with retail group JG Summit Holdings, and is acquiring a banking license in Pakistan.
These initiatives align with the strategy to target large populations that are young and digitally savvy but underserved by traditional banks.
To make the business model work, Tymebank has a low cost base with a strong focus on digital services.
Its global expansion will also help to rapidly grow its subscriber base and benefit from economies of scale.
|Population||60 million||110 million||220 million|
|Addressable market||40 million||60 million||100 million|
|Adults with a bank account||69%||12%||21%|
Tymebank’s products and services
Tymebank follows an agile project methodology with 2-week turnaround cycles to ensure it remains efficient.
Through this methodology, it is rapidly expanding product suite plans to grow its lending business to get a more meaningful return on equity.
New products that will increase the revenue earned per customer include:
- MoreTyme – a buy-now-pay-later (BNPL) service providing Point-of-Sale financing. Launched at the end of 2021, MoreTyme now has distribution agreements with over 950 retail brands.
- TymeAdvance – a payroll advance service offered in partnership with employers and gives clients access to a portion of their salary for the month before they have been paid.
- A credit card provided in partnership with RCS. It integrates with the Pick n Pay customer loyalty program that awards customers 4x SmartShopper points for card purchases.
- Tyme offers four insurance products, including health insurance and funeral plans.
- Personal loans – supported by big data to better determine the credit risk of individuals.
The company also recently launched the TymePOS app, with can turn any NFC-enabled android phone into a mobile point of sale device.
To bolster its transactional business banking offering, Tymebank has acquired fintech SME funder Retail Capital.
It gives Tymebank the ability to offer business lending with a specific focus on small and micro businesses underserved by traditional big banks.
Tymebank’s revenue forecast revealed that lending products are becoming a big earnings driver and will contribute around 18% of expected revenue in South Africa next year.
The Philippines is expected to be a profitable market, with insurance and investment services making up a much bigger proportion of revenue than in South Africa.
Tymebank has shown strong growth over the last three years, and the number of monthly transactions has increased even faster.
Despite this growth, it has been able to maintain a flat and fixed cost structure with only 550 employees.
It means that most of the growth filters to the bottom line, with annualized net operating income growing ninefold over two years.
Tymebank recorded $45 million in annual revenue and was able to turn $25.1 million of that into net operating income.
Jonker told investors that they expect TymeBank South Africa to reach profitability next year.
They also expect economies of scale to take effect with the roll-out of its second and third digital banks in the Philippines and Pakistan.
Because the groundwork has been done, it will reduce development costs and decrease the time to reach breakeven.