When South Africa’s first digital-only bank launched, many doubted it would make it. Banking was still understood in the traditional sense: a building with staff behind counters, safes in the back, fixed hours and paper-heavy processes. The idea that a bank with no branches, no tellers and no physical footprint could win over the public – let alone become highly successful – seemed far-fetched.
Six years on, TymeBank has exceeded every early expectation, boasting almost 12 million customers and nearly R7 billion in retail deposits. Discovery Bank, once dismissed as a loyalty-programme add-on, has grown into a substantial digital operation with millions of accounts.
None of these institutions could compete with the major banks in size, so they played to their strengths: convenience, simplicity, transparency and speed.
“People didn’t think these banks would survive, never mind become profitable,” says Harry Scherzer. “They underestimated how quickly South African clients would move when something better came along.”
These banks didn’t just win customers; they changed expectations. As customers grew used to faster, cleaner digital banking, fintechs stepped in and pushed the system even further with specialised services and quicker, more flexible solutions. Once people experienced fast digital onboarding, app-based banking, real-time balances and quick transfers, the old world of queues and slow clearing simply became unacceptable.
Payments: faster, simpler, cheaper
The transformation didn’t start with the digital banks alone. Once PayShap arrived in 2023, it pushed the whole system into a new gear. Suddenly, low-value transfers that used to crawl through overnight batches were clearing in seconds. Once transfers happen in seconds, new types of services become possible, and customers start expecting them everywhere. Within a year, PayShap’s transaction volumes had grown more than 1,000%, proof that when customers in South Africa are given something that works, they use it.
The South African Reserve Bank’s own paper on retail payments, released in September 2025, notes that low-value transfers are increasingly moving through instant, digital channels instead of old batch systems, not because consumers were told to move, but because they immediately recognised the advantage. Fast onboarding, real-time balances, reliable apps and instant money movement have now become the standard. Anything less feels archaic.
This is why new entrants were able to take off. With money moving at real speed, services that would have died under the old batch systems suddenly became viable. Specialist providers could offer quicker FX, targeted budgeting tools, instant income checks, cheaper international transfers and app-based investment platforms – all built on the expectation that data and funds should move now.
The irony is that the regulatory framework hasn’t caught up. South Africa still doesn’t have a formal, enforceable open-banking rulebook. There’s no single standard defining how banks must share data, what customers must consent to, how third-party providers plug in, or who carries liability when something breaks. In that vacuum, some banks have opened parts of their systems via APIs, but others haven’t – creating a patchwork that slows innovation for everyone else.
Scherzer argues this halfway house has exposed the difference between banks that genuinely want competition and banks that are hedging. “When people can move their information and their money more easily, companies have to win them over properly,” he says. “You can’t hide behind slow processes anymore.”
You can already see the impact where openness exists. More regulated intermediaries now offer international transfers at competitive rates and with quicker turnaround times, breaking the old grip of a few authorised providers. Investing has become radically more accessible too: platforms like EasyEquities have nearly a million active users buying small slices of local and global shares, something that once required big minimums and a stockbroker.
These gains didn’t arrive because the incumbents modernised. They arrived because new players forced the pace and consumers moved with them.
An industry with more real choice, but not yet the choice it could have
The big banks still dominate credit and deposits. Their balance sheets still anchor the system. But for the first time in decades, ordinary people in South Africa have credible alternatives for everyday banking, investing and cross-border payments.
That is the core achievement of the past decade. But without clear open-banking rules, the system can’t fully move on. Consumers have already shown they embrace digital innovation faster than the banks do, but the risk now is that the regulatory delay – and some banks’ reluctance to open up – is slowing down transformation that has already proven its value.
The moment the rules catch up, South Africa’s financial sector will have to compete properly. And consumers will be the ones who gain most from that.