History of Teba Bank
• Since 1976 the Fund has facilitated payments
to mining industry pensioners and dependants
in rural areas largely through Teba Limited
agencies
• Since 1988 the Fund has acted as Paymaster
to gold and platinum mines
• July 2000 full commercial banking licence
• Initial mandate – to provide financial services
to mineworkers and their families
• Extended mandate – to provide affordable and
accessible financial services to the existing
market and the broader communities
Strategic Advantage
Teba Bank is well placed to service its
particular markets:
• It understands the market in which it operates
• Its core function is to exclusively service this
market and no other
• Its services and distribution channels cater to the
specific needs of the market
Infrastructure and Distribution
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72 outlets on the mines in 5 provinces
10 outlets in rural areas
6 Mining Town Branches
70 Teba agencies in rural areas of Southern Africa
37 Saswitch linked ATMs
satellite network allowing real time banking at
bank outlets and ATMs
• Web access for debit order lodging for third
parties
Business Problem definition
• Affordable entry point to financial services
• Geographic accessibility
• Security
- network
- client
- bank
• Simplicity
• Adding real value to customers
Problem components
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Pricing and cost structure
Point of Sales distribution
Participation in national payments system
Telecommunications – coverage and cost
Systems – switching, databases etc.
Security for client and systems
Training and promotion
Components of the system
• Components
• Card
• Communications
• On Us POS System
• Off Us POS and ATM’s
• Backend System
• Transmission account
• Sub account system and triggers
• Reporting and MIS
Card Description
• The Card
• A plastic magnetic stripe card
• Linked to an online numbered account
• PIN based
• Counterfoil allows the user to easily obtain a
new card without having to go into a Teba
Bank branch but need only to go to an
issuing merchant with the counterfoil and his
PIN number.
• Reliable vehicle for money payouts
Teba Bank A-Card
Functionality
• Financial functionality
• Registration of account
• Purchase
• Cash back
• Transfer to other TAC accounts
• Pin-less stockless recharge of airtime
• Third party payments
• Information Functionality
• Third party payments
• Business
• Savings and buying clubs etc
Account Structure
• Transmission account
• The transmission account update immediately on
the receipt of information.
• This eliminates the risk allowing withdrawal of
more money than is available.
• Sub account
• This allows different functions to be linked to the
account such as medical payments only.
• It also allows contributions or payments to be
directly paid from the account at a certain time of
the month without having the expense of a debit
order.
Proposed communications
• Significant decrease in the data packet size
• GSM based coverage
• 50% cost effective than Fastnet per transaction
with no additional equipment.
• Able to carry information and the financial
transaction simultaneously.
Rollout to other banks
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Modular design
Multi currency
Interface adaptability
Communication structure independent for
countries that have low cellular / radio
coverage.
• Easy installation
Regulatory and legal issues
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National Payments System
Card associations
ICASA – telecommunications
Banks Act
Financial Intelligence Centre legislation (Money
laundering)
National Payments System
• PASA
• Swift
• PCH agreements
- technology risk
- settlement risk
• SARB
• Sponsorship option
• New switching hub
• Cost structure
• Mentorship
Card association membership
• Benefits for membership of strong card brand
e.g. Mastercard
- Merchant recognition
- Central bank and NPS members comfort
• Costs
Telecommunications
• Monopoly supplier in SA
• Security issues
Bank’s Act
• Deposit taking
• Supervisory concerns
- operational risk
- settlement risk
Financial Intelligence Centre Act
• Use of agents to open accounts
• Proposed legislation exemptions:
- payments of a maximum of $1500
- deposits not exceeding $200 if more than one
in a calendar month and at any time an amount
of $1500 which enables the account holder to
maintain a balance not exceeding $2,000
- no international transfers allowed
Conclusions
• Innovation of each element required for cost
effectiveness
• Support of regulators essential
• Question all assumptions made by vested
interests in status quo
• Careful use of alliances
• Know your customer and the environment