South African Digital Bank "TymeBank" will enter Indonesia at the end of 2024

South African digital bank, TymeBank, will reportedly expand to Indonesia at the end of 2024. Reporting Deal Street Asia, TymeBank is strengthening its market base in the Southeast Asia region after the company achieved profitability at the end of last year.

TymeBank will first formalize its presence in Vietnam by launching Merchant Cash Advance as its first product. Meanwhile, services for new retail customers will be available in the next 12-15 months. Likewise with the Indonesian market, the company will enter the initial stage through Merchant Cash Advance.

Merchant Cash Advance can be said to be a type of loan based on the business owner's future income. Business owners can use it for operational needs or to increase cash flow.

Tyme Co-Founder and CEO Coenraad Jonker revealed that his business model is suitable for adoption in the Indonesian market. His party also said that they had discussed with regulators and received a positive response to democratize financial access.

"Nevertheless, we will still pay attention to the competitive aspect and focus on offering unique value to customers," said Jonker, quoted from DealStreetAsia.

TymeBank now has operational bases in South Africa and the Philippines. Later in Indonesia and Vietnam, his party will apply the approach offline-to-online (O2O), similar in the Philippines because it is considered to have the same market characteristics.

"We combine models physical-digital. Digital kiosks are placed in retail stores offline, such as stalls, clothing stores, or office lobbies," he added. At these digital kiosks, customers can open an account in 3-5 minutes. Currently, TymeBank has around 500 kiosks in the Philippines under the GoTyme brand.

According to Jonker, the O2O approach allows companies to reduce customer acquisition costs (CAC), which has been a major obstacle for the digital banking industry in Asia.

According to the APAC Digital Banking Landscape report by Quinlan & Associates, the CAC of retail customers in the Philippines is around $4 per customer, while the CAC of retail customers in developing Asia averages $15-$50. In comparison, retail customer CAC in developed countries such as Hong Kong ranges from $65-$90.

In the last five years, the Indonesian banking industry has aggressively transformed into a digital bank. The player ecosystem continues to grow, and is supported by large groups, such as Bank Jago by the GoTo Group and Bank Saqu by Astra. Not only targeting the retail segment, other digital banks specifically target the MSME segment which is considered still hampered by access to capital, for example Superbank and Hibank.

According to data from the Indonesian Joint Funding Fintech Association (AFPI), as of 2020 more than 50% of the total MSMEs in Indonesia have not had access to capital from banks or other financial institutions. Meanwhile, in 2023 there will be around 66 million MSME business actors.