FinTech

Digital banks in South Africa – TymeBank vs Discovery Bank vs Bank Zero

Digital banks in South Africa – TymeBank vs Discovery Bank vs Bank Zero

South Africa has seen the launch of a number of digital banks in recent years as consumers move more to online and cashless platforms.

Aside from the traditional banks, each of which has an established customer base in South Africa, the country has three main players in the digital banking sector – Discovery Bank, TymeBank, and Bank Zero.

Discovery Bank, TymeBank, and Bank Zero were all officially launched in 2018, although it has taken each platform an extended period to roll out and grow their respective digital banking platforms.

Both Discovery Bank and TymeBank have launched products that are available to the general public, while Bank Zero’s digital banking platform is still in a beta stage. It should be noted that Discovery previously offered a Discovery Card product, which it has now migrated to Discovery Bank – moving existing customers onto the newer platform.

Each of these banks offers different value propositions: Discovery Bank can be integrated with your medical aid and Vitality rewards, TymeBank is supported at physical stores across the country and is accessible without expensive fees, and Bank Zero offers unique security features and a completely digital banking experience.

We have outlined the basic offerings of each digital bank below, and compared the growth and rollout of the platforms in South Africa below.


Discovery Bank

Discovery Bank offers a range of accounts depending on the customer’s income level, each of which offers different fees and features.

Minimum annual income for each Discovery Bank account tier is as follows:

  • Gold – Less than R350,000 per year
  • Platinum – From R350,000 to R850,000 per year
  • Black – From R850,000 to R2.5 million per year
  • Purple – More than R2.5 million per year

For each of these tiers, customers can choose between a transaction or credit card account, or they can select a full banking suite which offers the functionality of both.

Discovery Bank also offers unlimited savings accounts and access to a number of value-added features and rewards programmes.

Two of the marquee features of a Discovery Bank account are its Vitality money and Discovery Miles offerings.

Vitality Money allows you to take advantage of dynamic interest rates, control your financial behaviours, and benefit from financial activity coaching through the Discovery app.

Each customer can opt-in to this feature to receive a Vitality Money Status – which provides an overview of their financial health and determines whether they are eligible for dynamic interest rates.

Discovery Bank customers can also earn Discovery Miles through spending at partnered stores and connecting their Vitality Active Rewards account with their bank account.

Discovery Miles can be redeemed for shopping vouchers, airtime, or electricity, and they can be exchanged for cash.

The fees and features of the Discovery Bank Gold, Platinum, and Black full banking suites as reflected on the company’s website are detailed below.

Discovery banking suiteBlackPlatinumGold
Monthly fees
Monthly account feeR325R135R90
Monthly Vitality Money premiumR55R45R35
Monthly single credit facility feeR60R60R60
Total monthly account feeR440R240R185
Transaction fees
Cash withdrawal at local ATMUnlimited8 free4 free
Cash withdrawal at local point-of-sale2UnlimitedUnlimitedUnlimited
Cash withdrawal at international ATMUnlimitedR65R65
Debit ordersUnlimitedUnlimitedUnlimited
PaymentsUnlimitedUnlimitedUnlimited
Discovery Instant Pay (real-time payments)UnlimitedR10R10
Discovery PayUnlimitedUnlimitedUnlimited
Prepaid airtime, data and SMS purchasesUnlimitedUnlimitedUnlimited
Other fees
Point-of-sale swipes: local and internationalFreeFreeFree
Cash deposits at Pick n Pay and Boxer storesR19.95 per R5 000R19.95 per R5 000R19.95 per R5 000
Inter-account transfersFreeFreeFree
Balance enquiry at ATMFreeFreeFree
Payment notificationsFreeFreeFree
Own account notificationsFreeFreeFree
Returned debit orderFreeFreeFree
Declined transactionsFreeFreeFree
Secondary card (monthly)R30R30R30
Single credit facility initiation feeR165R165R165
Currency conversion fee2.75%2.75%2.75%
Card replacement fee (one free per year)R150R150R150
Health Banking (monthly)FreeFreeFree

TymeBank

TymeBank offers a single personal banking account – called its EveryDay Account – designed around accessibility and affordability.

The bank charges customers no monthly fees, account initiation fee, card issuing fees or card usage fees.

Cash withdrawals at Pick n Pay and Boxer till points are free, but it costs R8 to withdraw at any ATM and R2 at other major retailers. Cash deposits at Pick n Pay and Boxer stores are R4.

The EveryDay Account also includes a GoalSave saving tool which allows users to create up to 10 different savings account and earn up to 7% interest.

It also offers a SendMoney feature which lets users transfer funds to other via their South African cellphone number, as well as a TymeCoach App that gives users free access to their credit score and tops to help customers make better financial decisions.

The fees charged by TymeBank’s EveryDay Account are detailed below.

ActionFees
Cash Withdrawals
Debit card till point @ other retailersR2
Payments
Payment to other bank accountsR2
Debit order (internal)
Debit order (external – where your account is debited to pay a 3rd party)
Free
R2
Cash Deposits
Tymecode till point @ PnP & Boxer (R4 per R1000 or part thereof)R4
Debit card till point @ PnP & Boxer (R4 per R1000 or part thereof)R4
Payments
Send money (account to Tymecode)R4
Balance enquiries
Debit card other bank ATMR2
Cash Withdrawals
Debit card other bank ATM (R8 per R1000) or part thereofR8
Declines, disputes, and reversal fees
Debit order dispute: within 40 daysFree
Decline fee (due to insufficient funds or incorrect PIN)R2
Late payment reversal to TymeBankR8
Debit order dispute: Older than 40 daysR40
Late payment reversal to other banksR40
Unsuccessful debit card disputeR40
Debit Card
Debit card replacement feeR40
TymeBank Logo

Bank Zero

Bank Zero was first launched in January 2018 by former FNB CEO Michael Jordaan and Yatin Narsai, aiming to offer a mobile app-driven bank that offers customers control and transparency.

The bank has yet to launch a product to the public, with the company planning to launch a controlled public beta early in the second half of 2020.

Michael Jordaan previously told MyBroadband those who join this public beta will be selected from interested parties who supplied their details on the Bank Zero website.

He said that Bank Zero is in the process of putting the finishing touches on its platform’s functionality, and is conducting end-to-end testing.

“The mobile-only thinking behind Bank Zero would, of course, be ideal in the current lockdown state, so the team is working very hard on their development sprints so that we can start the controlled public beta,” said Jordaan.

The bank has already gone live with its patented debit card, which will offer added security and convenience features.

These include support for multiple card numbers which include a standard card number printed on the card’s surface which can be used for online payments, as well as a separate card number stored in the magnetic stripe for physical purchases.

Bank Zero

Growth and plans

Bank Zero has not yet launched to the public, and subsequently has not accrued any subscribers which can be compared with its competitors. The latest information available regarding the number of Discovery Bank users is from its interim results for the six months ended 31 December 2019.

This reflects that as of 18 February 2020, Discovery Bank had 78,000 clients with a total 180,000 accounts. When the bank launched, Discovery CEO Adrian Gore expected to bring on 1,000 clients a day at an expected level of one account per client. It has grown slower than this, but the bank has also seen growth in the number of accounts per client.

TymeBank said at the end of July 2020 that it had reached over 2 million customers – 60% of which are active clients. This shows that Discovery has been adding an average of 10,263 clients per month. TymeBank, on the other hand, has been adding an average of 117,647 customers per month, of which 70,588 have become active customers.

The monthly growth in active users across both banks is summarised below:

  • Discovery Bank – 10,263 clients per month
  • TymeBank – 70,588 active customers per month

Users can sign up for Discovery or TymeBank accounts from the banks’ official websites, or by downloading their official mobile apps.

Source: mybroadband


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