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 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 suite||Black||Platinum||Gold|
|Monthly account fee||R325||R135||R90|
|Monthly Vitality Money premium||R55||R45||R35|
|Monthly single credit facility fee||R60||R60||R60|
|Total monthly account fee||R440||R240||R185|
|Cash withdrawal at local ATM||Unlimited||8 free||4 free|
|Cash withdrawal at local point-of-sale2||Unlimited||Unlimited||Unlimited|
|Cash withdrawal at international ATM||Unlimited||R65||R65|
|Discovery Instant Pay (real-time payments)||Unlimited||R10||R10|
|Prepaid airtime, data and SMS purchases||Unlimited||Unlimited||Unlimited|
|Point-of-sale swipes: local and international||Free||Free||Free|
|Cash deposits at Pick n Pay and Boxer stores||R19.95 per R5 000||R19.95 per R5 000||R19.95 per R5 000|
|Balance enquiry at ATM||Free||Free||Free|
|Own account notifications||Free||Free||Free|
|Returned debit order||Free||Free||Free|
|Secondary card (monthly)||R30||R30||R30|
|Single credit facility initiation fee||R165||R165||R165|
|Currency conversion fee||2.75%||2.75%||2.75%|
|Card replacement fee (one free per year)||R150||R150||R150|
|Health Banking (monthly)||Free||Free||Free|
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.
|Debit card till point @ other retailers||R2|
|Payment to other bank accounts||R2|
|Debit order (internal)|
Debit order (external – where your account is debited to pay a 3rd party)
|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|
|Send money (account to Tymecode)||R4|
|Debit card other bank ATM||R2|
|Debit card other bank ATM (R8 per R1000) or part thereof||R8|
|Declines, disputes, and reversal fees|
|Debit order dispute: within 40 days||Free|
|Decline fee (due to insufficient funds or incorrect PIN)||R2|
|Late payment reversal to TymeBank||R8|
|Debit order dispute: Older than 40 days||R40|
|Late payment reversal to other banks||R40|
|Unsuccessful debit card dispute||R40|
|Debit card replacement fee||R40|
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.
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.
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