SA’s largest bank by customer numbers, Capitec, is set to launch a foray into the growing cross-border remittances market , targeting about seven African countries, in a move that will see the group further diversify its revenue streams.
“I think it’s quite exciting to go into that particular market,” Gerrie Fourie told the group’s shareholders at the AGM held on Friday, his last day at the helm of the lender following his retirement.
He did not mention the countries the bank has selected for the product’s launch, with the financial services group saying it will issue a public communication soon.
The move by Capitec, which prides itself on taking to market easily understandable products at lower costs, is set to expand competition in the multibillion-rand segment.
Remittances, the cross-border payments that migrants living and working outside their country of origin send back home to loved ones, have been a lifeline for many migrant families.
SA has a huge migrant community, particularly from neighbouring countries such as Zimbabwe, Malawi, Lesotho and Mozambique.
Many families throughout the Southern African Development Community (Sadc) region depend on income received via cross-border remittance, according to the FinMark Trust.
Costs in focus
UN Sustainable Development Goal 10 commits to reducing the transaction costs of migrant remittances to less than 3% by 2030, and no corridor should have costs greater than 5%.
By reducing average costs to 3% globally, remittance families would save an additional $20bn annually, according to the UN.
Over the years, the growth of competition in Africa’s financial services market has helped speed up the time it takes for payments to clear, while reducing costs. The landscape includes players such as World Remit, Mukuru, MoneyGram, Nala, Chippa and, increasingly, mobile operators.
Business Day reported last year that Vodacom is looking to grow its cross-border mobile payments offering beyond consumers, to target businesses transacting across international lines.
Capitec has over the past five years been aggressive in expanding its product range. This has seen the Stellenbosch-based bank make a foray into business banking and value-added services, and has added Capitec Connect to its offering.
It also acquired its own insurance licence to complement its personal banking offering.
Capitec Connect is the lender’s mobile virtual network operator (MVNO) business. MVNOs are usually businesses — including FNB, Standard Bank Mobile, Mr Price Mobile and Pick n Pay — which lease network infrastructure from mobile operators to sell data and voice services to customers.
A recent innovation by the bank is Capitec Pay. It allows clients to enter their cellphone number on e-commerce sites and authenticate on the lender’s app without requiring card details in a bid to beat fraud.
The expansion of its product and service offering resulted in continued growth in its active client base to 24.1-million at the end of February.
Capitec has positioned itself as a high-volume, low-margin business that provides access to personalised simple, transparent and affordable products.
Fourie said the group is selling about 16,000 new life policies a month. The group is also preparing to launch Capitec-funded, secured home loans in the first half of the 2026 financial year.
With Mudiwa Gavaza
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