TymeBank, South Africa’s digital bank, plans to expand its commercial banking service via a number of new projects, the most important of which is the planned purchase of Retail Capital, a fintech firm that offers finance to South African SMEs and enterprises. Retail Capital would become a subsidiary of TymeBank and the backbone of the bank’s expanded business banking offering if the transaction is approved by regulators.
Retail Capital’s funding expertise and TymeBank’s deposit base and operations would be integrated to service a larger client base under the terms of the agreement. TymeBank believes that being able to properly route funds to South African company owners is important to the advancement of the previously neglected small business sector.
Coen Jonker, CEO, TymeBank said ”This acquisition will enable TymeBank to expand its offering to entrepreneurs 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 optimized to a significant degree for small-business funding. Together, we look forward to providing access to innovative solutions to ensure business owners can fuel their growth, drive job creation and contribute to the broader economy.”
The two companies have a lot to offer, with an evolving suite of digital solutions that make doing business in a difficult environment easier. TymeBank’s current Business Banking offering, which already has over 100,000 customers, includes, among other things, 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.
Through a simple three-step online application process, Retail Capital lowers the barriers to funding for SMEs. Over the last ten years, Retail Capital has provided over R5.5 billion in working capital to over 43 000 South African business owners, making it the largest SME funder of its kind in the sector.
Retail Capital has established itself as an award-winning fintech partner in the last five years, providing businesses with instant access to funding through embedded solutions, and they will continue to support the economy through innovative funding technology and strong partner relationships. Both companies are economically complementary and synergistic. Retail Capital’s small business product offering necessitates a flexible source of low-cost capital, which TymeBank’s deposit base can provide.
Karl Westvig, the CEO, of Retail Capital, remarked ”Retail Capital has a long history of supporting SMEs by enabling them to access affordable funding that helps their businesses grow. Now, through this acquisition by TymeBank, we will be able to scale the offering, giving SMEs the opportunity to expand through funding that works on their terms. Retail Capital already powers many industry-leading partners in the Acquiring, Retail, and Payments space to support their SME customers and the tie-up with TymeBank will further enhance this offering to our partners’ customers. Both Retail Capital and TymeBank have the customer front of mind, and we see the strategic move as a positive one that will greatly assist all business owners in South Africa.”
Tyme Group’s multi-country digital banking presence will also allow Retail Capital to grow and expand into new markets. TymeBank’s business customers will benefit from the launch of a new offering, TymePOS, a mobile point-of-sale app that transforms an NFC-enabled smartphone into a tap-and-go payment device.
TymePOS, as a softpos solution, provides the best pricing in the market for merchants of this size. It also offers merchants market-leading next-day settlements (the industry standard is seven days). The app is available for download on the Google Play Store, and app onboarding takes only two minutes for TymeBank Business Banking customers. Customers will then receive a merchant ID and will be able to begin accepting card payments within 24 hours.
