As a condition for obtaining regulatory approval for the acquisition of fintech company Walletdoc, Capitec agreed to provide its Capitec Pay platform to competing payment service providers. Furthermore, the company commits not to favor this platform over the general instant payment system used by the banking industry.
The Competition Commission recommended that the Competition Tribunal approve the deal provided these conditions are met. However, the final decision on the deal must still be made by the tribunal, and the conditions will only come into effect after that.
In a statement summarizing the decisions made at the regular meetings on July 21 and August 3, the commission disclosed its decision. Under the stipulated conditions, the merged entity must make Capitec Pay available to third-party payment service providers (PSPs) that are technically and commercially capable of integrating with the platform. It is also prohibited from using confidential business information obtained from competing PSPs through their access to Capitec Pay to compete against them.
Capitec is also obliged to treat PayShap Request and the Rapid Payments Programme backbone no less favorably than its own Capitec Pay product, except where differences are due to objectively verifiable and proportionate factors such as scheme design rules and risk control capabilities.
Capitec Pay is the bank's proprietary bank-to-bank payment product that allows merchants to accept online payments without customers needing to enter card details. Walletdoc is a registered third-party payment service provider and system operator that offers Capitec Pay to its merchants alongside card payments, EFT payments, and PayShap.
According to the commission's description of the parties, Capitec is already actively involved in acquiring from merchants, processing payments, and accepting payments independently. Thus, this deal places Capitec on both sides of the same market. The company owns the payment backbone necessary for competing PSPs to offer Capitec payment options to their merchants, and simultaneously will own a PSP competing with these same providers for merchant business.
The commission noted that the deal does not raise significant concerns regarding public interest. PayShap was launched in March 2023 with the participation of four banks and was developed by BankservAfrica (now PayInc) in conjunction with the South African Payments Association. Capitec joined the system several months later.
However, the implementation of the system proved disappointing. As reported by TechCentral in December, high and inconsistent fees kept PayShap at a low level because sustainable and frequent usage was low across all banks—and there was a structural deterrent in the fact that cheap instant payments reduce the fee income banks receive from services that PayShap could replace.
The government has taken steps in this direction. BankservAfrica changed its name to PayInc in August 2025, when the Reserve Bank acquired a 50% stake and transformed the company into a national payment utility. This plan is based on the observation that the adoption of digital payment backbones, including PayShap, lags behind developing markets such as India and Brazil, where the main barrier is cost. The Competition Commission also recommended approving this deal.
Capitec announced the acquisition of Walletdoc in December, agreeing to pay R300 million upfront cash plus a deferred bonus of up to R100 million over three years, tied to Capitec's share price and dependent on achieving performance targets. Walletdoc was founded in 2015 by Leonard Schenker and Dan Wagner, initially as a consumer bill payment application. It provides payment gateway, payment orchestration, and merchant acceptance services, primarily for e-commerce, but also facilitates card acceptance through point-of-sale devices. Walletdoc Holdings is wholly owned by Walletdoc International, a private company registered in Cyprus.
New players are emerging capable of challenging Capitec. Previously, attempts by Standard Bank and FNB did not lead to a significant change in Capitec's development trajectory; however, the digital bank GoTyme, which rebranded from TymeBank in April, attracted over 12 million customers faster than expected. Meanwhile, Capitec maintains a strong position, boasting a market capitalization of 545 billion rand on the JSE and a customer base of 14.3 million people.
However, PlusB, Pepkor's future banking structure, differs from its competitors not so much in the product it currently lacks, but in what it brings with it. The timeline for this project is no longer hypothetical. Pepkor received approval from the Prudential Authority in November 2025 to establish the bank and submitted an application under section 16 concerning operational readiness at the end of March 2026. The final regulatory step is obtaining permission to accept deposits.
The bank launch is scheduled for April 2027 under the leadership of CEO Merwe Scholtz, who began his career at Capitec. The company's goal is to reach 1.8 million customers with core banking services by 2032. Pepkor's store network processes 22 million cash deposits and withdrawals annually, as well as four million account payments. These transactions occur directly in stores where people purchase essential goods weekly, rather than in offices or kiosks in expensive shopping malls.
It is important to accurately define the scale of Pepkor's presence, as the overall figure differs from the relevant one. The group has 6,500 physical points of presence. The group's South African retail portfolio, including Pep, Ackermans, Dunns, Shoe City, and Tekkie Town, exceeds 2,500 stores, which is more than the combined branch networks of the four largest banks. It is this South African portfolio that the South African bank can leverage.
Furthermore, Pepkor has 32 million customer touchpoints: these are individuals who have purchased clothing on credit, financed a phone through FoneYam, or paid a bill at the checkout. These individuals are already known to Pepkor and are not merely potential customers. However, the quality of these relationships varies greatly. The same customer might be listed across several separate Pepkor businesses. For example, installment payments for clothing constitute a different data asset than a payment for a FoneYam device, which again differs from a bill payment. A significant portion of this data may be inactive or too small to support credit underwriting. Thus, the pool of potential customers is smaller than it appears at first glance.
FoneYam provides a useful credit signal that is now substantial: by the end of March, the company had a book balance of 2.6 billion rand and 2.4 million active customers, representing a 53% increase over 12 months. Knowing who can afford a monthly payment of 150 rand gives insight into payment discipline, although this is not equivalent to personal credit underwriting and is insufficient for calibrating a credit portfolio during a downturn.
There is also Flash, a fintech business infrastructure that processes transactions for utilities, electricity, and payments in small local shops (spaza shops) across South Africa, and it belongs to Pepkor. No previous competitor of Capitec possessed such a combination of distribution, customer data, and informal economy infrastructure. Nevertheless, this advantage carries a risk: Flash processes low-value transactions without customer identity verification (no-KYC). Agent-based banking requires full Fica compliance at the point of service, whereas the informal traders that make Flash valuable are precisely where compliance with these regulations is most difficult.
The most pressing question is that MTN is already operating in this channel with 22,000 agents. The company launched MoMo Pay for informal traders in 2025 and formalized its partnership with spaza shops in June 2026. PlusB aims to gain approval for what MTN is already doing. Analysts suggest that the PlusB thesis is based on the assumption that Pepkor already possesses customers and data and only lacks banking infrastructure. However, it must be remembered that the implementation of core banking systems regularly suffers delays in terms of time and cost. The capital expenditure of 920 million rand does not address issues of integration, change management, or the learning curve when managing a credit portfolio considering risks. Pepkor currently lacks debt collection functions, anti-fraud operations, and regulatory capital. These can be created, but building these systems simultaneously with attracting an existing customer base and launching a payment product presents a complex execution challenge.
Part of Capitec's strategy that receives insufficient attention is execution discipline. Capitec's advantage was built over years of operation in this market, not acquired through data aggregation. The parallel in distribution with Pepkor is real, but the operational parallel is assumed, not demonstrated.
The thesis of transitioning from retail to banking has mixed global experience. Walmart attempted to enter the US banking market twice but failed both times. The second time, it withdrew its application for an industrial credit company charter in March 2007 after discovering that the Federal Deposit Insurance Corporation would not provide deposit insurance. The obstacle was regulatory objection to large-scale combinations of retail and banking, not a lack of distribution. Since then, Walmart has developed financial services through partnerships and fintech projects.
The UK offers a longer experiment. Marks & Spencer sold its financial division, HSBC, in 2004 for 580 million pounds sterling. The M&S Bank brand was launched in 2012 as an HSBC-backed venture with in-store branches and current accounts, but it subsequently scaled back its operations to cards, loans, and savings, and this year it abandoned an independent banking license, becoming part of HSBC UK. Fourteen years of a trusted retail brand, a loyal customer base, and backing from a banking balance did not result in the creation of an independent institution.
Neither of these examples directly matches the situation with PlusB in a market where formal banking penetration is not yet complete. However, both cases serve as reminders that the gap between asserting 'we know our customers' and 'we manage a profitable portfolio at scale' is where most retail-to-banking transition projects fail. Distribution is necessary, but it is not sufficient.
These precedents also raise the issue of pricing. Comparing it to Capitec suggests that PlusB will copy Capitec's low-fee model. Pepkor's more direct route is cross-selling credit and insurance to its already known base. If this is the case, PlusB might end up being more expensive for the mass consumer than implied by the analogy. This is a legitimate strategy, but it is not identical.
