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How TFG plans to capture a new part of the market through its partnership with TymeBank

TFG launched its financial product TymeBank at its Jet stores last month.TFG launched its financial product TymeBank at its Jet stores last month.Gallo Images/Papi Morake

Lay-bys have been a vital part of South Africa’s shopping culture, but retailer The Foschini Group (TFG) is shaking up its strategy by adding to that offering in hopes of tapping into a new generation of shoppers.

The group – whose brands include Jet, Sportscene, Fabiani, Markham and G-Star Raw – recently finalised a deal with digital bank, TymeBank, that will enable shoppers to make use of a buy now pay later facility.

Jet Stores’ head of financial services, Garrett da Silva, explained that instead of a lay-by, which the group continues to offer, shoppers can pay a 50% deposit for products, take the goods and pay the remaining balance over a three-month period, interest free. 

“Globally, this thing [buy now, pay later] has taken off, especially for the younger generation, you get your instant gratification, you don’t have to wait for your three months lay-by,” da Silva said.

Jet is the flagship brand for the rollout of MoreTyme, which happened during November, while the rest of the brands’ rollout will happen in 2022. TFG acquired Jet in 2020, gaining access to the lower-income market. 

For years, Jet shoppers have been lay-bying clothing ahead of the festive season and school uniforms for the new year. But now, they get to walk away with the apparel and other products sold in the store pay later.

TFG already has financial services, offering 13 insurance products in addition to its store card, but MoreTyme beefs up the group’s offering.

Shane van Niekerk, MD of Jet, said: “If you look at the TFG world, [we have] 2.5 million people who need some form of credit, or some form of insurance … or financial service, which they can get at a much cheaper rate with us, than going to a formal institution.”

He added that the MoreTyme is not a product overload, but simplifies shopping instead, giving consumers another payment option. And it’s not an extra burden that comes with additional risk for the retailer.

“It’s no extra burden on us because everything goes through the system, it’s just another method of payment,” Van Niekerk said. 

In addition to the buy now pay later benefit, shoppers will also have access to affordable transactional banking and a TFG/TymeBank debit card. TFG’s longer term plan is to add personal loans to the mix. 

For TymeBank, which is focused on affordable banking, the partnership means that its reach is extended. And the group takes on the administrative responsibility of having to follow-up with slow payers and the risk of non-payment.

But Da Silva warned that shoppers who are keen to try out MoreTyme, will still have to go through a credit process that will include checks and verifications and may get denied. However, the process is less stringent than that of getting a loan or a store or credit card. 

TymeBank also charges a penalty fee for late payments and 2% interest for missed payments.

Wayne McCurrie, portfolio manager at FNB Wealth and Investments, said although the partnership is good for both TFG and TymeBank, the bank benefits the most. 

“There’s only one place you make money in banking and that’s by lending money out … you don’t make money from transactions, especially the new banks, Bank Zero and TymeBank.

“One of their selling points is very low transaction fees and you don’t make money from transactions, especially if you are on a race to the bottom with the lowest fees,” McCurrie said.

Article Source & Credit: News24

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