A farmer in rural South Africa opens a bank account in under three minutes at a grocery store kiosk. A street vendor in São Paulo gets her first credit card without ever stepping into a bank branch. A 20-something in Seoul transfers money to a friend through a chat app, skipping the traditional banking system entirely.
These aren’t hypotheticals. They’re real outcomes from three regions that welcomed their first major digital-only banks. Each market looked different on the surface, but the patterns underneath tell a consistent story about what happens when branchless banking shows up.
Case 1: Nubank rewrites the rules in Brazil
When Nubank launched in 2013, Brazil’s banking sector was dominated by five major institutions that controlled roughly 80% of assets. Fees were high, bureaucracy was thick, and about 30% of the population had no bank account at all.
Nubank started with one product: a no-fee credit card managed entirely through a smartphone app. The simplicity worked. By 2024, the company had grown to serve around 94 million customers across Brazil, Mexico, and Colombia. A joint study by Nubank and Mastercard, analyzing data from 3.6 million customers, found that 60% moved from basic account access to active product usage within 24 months. Forty percent hit that milestone in just 12 months, regardless of income level.
Three things shifted in the broader market once Nubank gained traction:
- Traditional banks dropped fees. Itaú, Bradesco, and other incumbents launched their own digital sub-brands to compete on price.
- Credit access expanded. Nubank’s internal data showed that 3.8 million customers were using formal financial services for the first time.
- Financial literacy improved organically. Among prepaid card users, 67% eventually accessed loan products and 36% began investing, suggesting that simple entry points create pathways to more complex financial behavior.
Brazil’s PIX instant payment system, launched by the central bank in 2020, accelerated this shift further. Within three years, PIX enabled over 36 million citizens who previously couldn’t complete digital transactions to participate in the financial system.
Case 2: KakaoBank captures half of South Korea in under five years
South Korea wasn’t a market with a financial inclusion problem. Smartphone penetration sat at roughly 95%, and most adults already had bank accounts. The gap was different: people were overbanked and underserved. Branch-heavy banks charged high fees, loan processes were slow, and user experiences lagged far behind what Koreans expected from their other digital tools.
KakaoBank launched in July 2017 as a subsidiary of Kakao Corp, the company behind the KakaoTalk messaging app used by 88% of South Koreans. The results were immediate: 240,000 customers signed up on day one. Within two weeks, the bank crossed 2 million users. By the end of 2024, that number had reached 24.9 million, meaning roughly half of South Korea’s population was using the app.
What made KakaoBank’s impact different from a typical fintech story is how it forced the entire banking sector to rethink cost structures. Traditional Korean banks often spent up to 60% of their operating budgets on branch operations and back offices. KakaoBank had none of that overhead. It passed the savings along as lower interest rates on loans and higher rates on deposits, and the incumbents had to respond.
The competitive pressure produced measurable outcomes:
- Traditional banks accelerated their own app development and began closing branches
- Loan processing times across the industry shortened from days to hours
- KakaoBank turned profitable in 2019 (just two years after launch) and reported net income of 440.1 billion won (about $303.8 million) in 2024
The bank also extended credit to borrowers that traditional institutions overlooked. In 2024, over 2.5 trillion won in loans went to mid-to-low credit borrowers, representing 32.4% of its portfolio. That’s a segment most Korean banks historically avoided.
For regions considering how to build mobile banking app development capabilities, KakaoBank offers a critical lesson: the technology itself isn’t the moat. Embedding banking into an app that people already use daily (in this case, a messaging platform) collapsed the adoption curve in ways that a standalone banking app never could.
Case 3: TymeBank proves digital banking works at the bottom of the pyramid
South Africa presented a third, distinct challenge. While 85% of adults technically had bank accounts (according to the World Bank’s 2021 Global Findex), most used them rarely. An estimated 7 million adults remained fully unbanked. Monthly fees at traditional banks ran up to R60 for basic transaction packages, pricing out low-income customers.
TymeBank launched in February 2019 with a stripped-down model: no branches, no monthly fees, and account opening through kiosks placed inside Pick n Pay and Boxer grocery stores. A customer could go from zero to fully banked in under three minutes. The cost to onboard each kiosk customer was roughly $3, and web signups cost about $0.60 per customer. Compare that to $350 to $380 at traditional banks.
By mid-2025, TymeBank had crossed 17.5 million retail customers, adding around 450,000 new users monthly. The bank hit profitability in December 2023, less than five years after launch.
The customer profile tells the real story of what happened in the region:
- Low-income women and rural customers are overrepresented in TymeBank’s active base compared to South Africa’s overall banked population
- Young, rural, low-income women (the most financially excluded segment in the country) make up 7% of TymeBank’s active customers versus just 2.3% of the broader banked population
- 70% of TymeBank customers report improved quality of life since joining
- The bank financed over 50,000 SMEs through merchant cash advances by end of 2023
TymeBank’s $4.50 customer acquisition cost proved something that skeptics doubted: you can serve the bottom of the economic pyramid profitably if your cost structure is built for it from day one. In late 2024, Nubank invested $150 million into TymeBank’s $250 million Series D round, a signal that the model is replicable across emerging markets.
This content is provided for informational purposes only and is not a substitute for professional advice. AFP editorial staff were not involved in the creation of this content.
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