JOHANNESBURG, Sept 28 (Reuters) - TymeDigital, a South African online money transfer business bought by Commonwealth Bank of Australia two years ago, has been granted a banking licence, its chief executive said on Thursday, opening the way to it becoming a full online bank.
TymeDigital will enter a retail banking market dominated by the country’s five biggest banks: Standard Bank, FirstRand, Barclays Africa, Nedbank and Capitec Bank.
“This is a key milestone in our plans to launch a full-service digital bank and disrupt banking in South Africa,” CEO Sandile Shabalala said.
“We believe that TymeDigital will not only transform the banking landscape but will fundamentally change how South Africans consume banking products and services.”
TymeDigital, which is 90 percent owned by the Commonwealth Bank of Australia and 10 percent by African Rainbow Capital , will service emerging middle class consumers and what it calls under-served small businesses.
“Here we think that’s the segment that is still strongly under-served and under-capitalised by the banking industry,” Commonwealth Bank of Australia Group CEO Ian Narev said.
TymeDigital is set to challenge Capitec’s rise as a low-cost bank, which has prompted a price war in a country where many people can’t afford an account.
Only around half of the 55 million population in South Africa have bank accounts, according to Nielsen research, partly because of the charges involved.
The TymeDigital bank, which will be launched in the second quarter of 2018, will offer bank accounts that would allow customers to deposit and withdraw money at Pick n Pay stores and using their mobile phones.
It already operates the Money Transfer service in partnership with Pick n Pay and Boxer, with a 200,000 customer base for the service.
This is the first licence issued to a new bank by the Reserve Bank since 1999. (Reporting by Nqobile Dludla; Editing by Tiisetso Motsoeneng, Greg Mahlich)