Revolut's application process for obtaining a banking license in South Africa is ongoing, and the company remains focused on a 2028 launch. This timeline is long for a constantly evolving market. By 2028, the gap in application quality that Revolut utilizes elsewhere is likely to narrow, new players will establish themselves in the market, and the reform of the National Payment System will change the value of the license itself.
The European model functions as follows: free accounts attract customers, some of whom transition to paid subscriptions, and the resulting revenue is used to finance lending, savings, and trading. This model is effective where the banking sector is fragmented, foreign exchange commissions are excessive, and cross-border money flows occur with minimal friction. South Africa is characterized by high fees, a concentrated banking market, and controlled international flows.
Currency restrictions apply. An individual can transfer up to 2 million Rand per year under a single discretionary permit without tax declaration, plus an additional 10 million Rand for foreign investment with such confirmation. Design improvements do not eliminate these restrictions, as they limit the volume and speed of operations that ensure the profitability of the European model.
Nevertheless, Revolut can surpass local banks in terms of convenience for fund transfers within existing regulatory frameworks by collaborating with an authorized dealer. The network of such dealers is mainly represented by large banks. How closely Revolut can replicate its European advantages—current exchange rates, transparent pricing, fast transfers—will depend on what the partner allows and at what cost.
Revolut's target customers already use FNB, Standard Bank, Absa, Nedbank, or Investec, often utilizing them for loans such as mortgages, car loans, or business accounts, and participating in loyalty programs. Adding a currency wallet is easy, but taking out a 20-year mortgage is not. Discovery Bank is the closest competitor; its paid subscription model and integration with Vitality target the same group of high-income, highly mobile clients, and it reached one million customers in August 2024, two years ahead of its own plan. The reason for retaining these clients is not price.
Concentration in the sector is very high. According to World Bank data, the three largest banks accounted for about 79% of banking assets in 2021, and the Reserve Bank's own risk assessment shows that six major banks control approximately 93% of the sector's assets. The positions Revolut held in Europe were drastically different from this situation.