TymeBank chases business banking market share with purchase of Retail Capital
Just more than three years after launch, TymeBank is making an aggressive push into business banking with the acquisition of fintech SME funder Retail Capital for an undisclosed amount and the launch of a free financial tool platform for businesses.
TymeBank launched its credit card offering earlier this year and the announcement this week cements its business offering. The acquisition, which is subject to regulatory approvals, will combine Retail Capital’s funding expertise and TymeBank’s deposit base of more than five million customers, including 108,000 business banking clients.
TymeBank chief executive Coen Jonker says the acquisition enables the bank to expand its current business banking proposition to include working capital finance.
“Retail Capital has acquired significant risk management experience over the past decade and through different economic cycles. They have an experienced team in place and their risk models and operational processes have been battle-tested and optimised to a significant degree for small-business funding,” he says.
TymeBank’s current business banking offering includes a transactional business account that can be opened in under five minutes, zero monthly bank fees, free debit card and online purchase transactions and free bulk payments.
In line with TymeBank’s quick digital systems, Retail Capital offers SME funding through an easy, three-step online application process. In the past 10 years, Retail Capital has already provided more than 43,000 business owners in South Africa with more than R5.5-million in working capital, making it one of the largest SME funders.
“We have a long history of supporting SMEs (with) affordable funding that helps their businesses grow. Now… we will be able to scale the offering,” says Retail Capital chief executive Karl Westvig.
Tyme Group, which plans to launch shortly in the Phillipines and has applied for a licence in Pakistan, will also enable Retail Capital’s international expansion into other markets.
The business banking offering will see the launch of two new offerings: TymePOS, a mobile point-of-sale app that turns an NFC-enabled phone into a tap-and-go payment device, and business tool platform, TymeTrybe.
TymePOS offers next-day settlements for merchants in an industry where the standard is seven-day settlements. The app is available for download on the Google Play Store, and it will take a TymeBank business banking customer just two minutes for app on-boarding. Clients will then receive a merchant ID and can start processing card payments within 24 hours.
Merchants using TymePOS will pay a R1 fee for every R50 processed and TymeBank business accountholders do not pay monthly fees. The fee is capped at R1 per R50 for transactions up to R10,000, and for higher amounts the merchant pays a fee of 2% on the value of the transaction.
It is a competitive rate, as per the table below:
TymeTrybe, which will go head-to-head with First National Bank’s business coaching platform, Fundaba, will offer entrepreneurs accredited courses and other educational services, as well as access to networking opportunities.
By the end of November last year, more than 192,000 entrepreneurs had accessed the Fundaba learning platform. Available as either a learning journey or a troubleshooting helper in five languages, Fundaba includes videos, podcasts, articles and downloadable business planning templates.
Jesse Weinberg, co-head of the SME Segment at FNB, says collating data over the past year enabled the bank to identify popular topics with high engagement rates. These included writing a business plan (with a downloadable template), getting a business ready for funding, identifying skills and gaps, finding a unique selling point and product pricing.
Fundaba was launched in November 2019, just ahead of the Covid lockdowns. “Despite the difficulties posed by the lockdown, and maybe because of them, we have seen an increased interest and take-up of these solutions by new and existing entrepreneurs looking to enhance their business knowledge,” Weinberg says.
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TymeTrybe is currently still in the pilot phase and will be available from September this year. The platform was designed by Tribe Fintech, a global fintech company that has partnerships with several high-profile organisations, including global tech giant Meta, Wits Business School, BrownSense and SMEasy as contributors to the platform.
Also in the pipeline is an innovative web-based e-commerce app that will enable small merchants to sell their products on social media platforms such as Facebook and Instagram. A delivery service – SellOnSocial – will be included as part of the offering.
“The small business sector in this country is vital to economic development and job creation and deserves all the help it can get, particularly given the immense hardship of the last few years.
“We believe our revitalised business banking offering is what small business owners want, need and deserve,” said Jonker.
The only thing TymeBank seems to be missing now is a home loan offering. BM/DM