TymeBank has the lowest digital banking fees in South Africa, with Bank Zero coming in a close second, Solidarity’s Bank Charges report for 2024 has revealed.
The South African trade union created a basket comprising digital transactions, monthly administration fees from the country’s digital banks, and entry-level accounts available through prominent banks.
Solidarity found that TymeBank and Bank Zero offer clients who do not need a branch or extensive banking services the best value for money and by some margin.
“To do the 14 transactions in our basket at these banks costs R14 and R17, respectively, while it would cost R41.25 at the closest competitor among the traditional banks,” said Solidarity.
Its comparison assumed that clients make no cash transactions and only include digital transactions and monthly account fees. It added that it took all debit orders and Internet banking payments to be external.
“The main factor determining the winner is the number of transactions that carry no cost. In this case, TymeBank is slightly ahead of Bank Zero,” it said.
“In the case of both banks, the only transaction on our list that has a cost is sending cash to a cellphone number.”
“For customers who do not need physical branches, these banks [TymeBank and Bank Zero] therefore are ideal. The cost difference speaks for itself,” added Solidarity.
The chart below compares the cost of the 14-transaction basket across several entry-level bank accounts.
How TymeBank and Bank Zero shook up the banking space
The digital-only banks offer low-cost accounts with the goal of making banking more accessible to the South African public.
Both offer accounts with no monthly account fees, or fees for debit card purchases, electricity recharges, or online transactions.
The banks don’t rely on the traditional banking structures of established banks like head offices, branches, and numerous employees; instead, they run entirely on an app.
TymeBank works slightly differently from Bank Zero. It has a partnership with Pick n Pay and Boxer supermarkets, which offer physical spaces for the bank’s customers to access banking services if required.
Bank Zero also launched deposits at Checkers and Pick n Pay stores in 2022 — a feature that customers highly requested.
This departure from traditional banking helps to keep fees low, making digital banks like Bank Zero and Tymebank attractive to lower-income residents.
This approach to banking has helped TymeBank accumulate 8.5 million customers since its launch, and it announced that it reached its first month of profitability in December 2023.
“We are extremely proud of our achievement, particularly when you consider that globally, less than half of the top 100 digital banks are profitable,” said TymeBank CEO Coenraad Jonker.
“In fact, a recent study stated that less than 5% of all neobanks worldwide had reached profitability.”
Bank Zero hasn’t recently reported customer numbers. However, the Google Play Store shows that the Android app has been downloaded over 50,000 times in South Africa.