Bank Zero is looking to add global payments to its offering and wants to partner with fintech companies as it prepares for the R1.1-billion takeover by JSE- and Nasdaq-listed Lesaka Technologies.
Lesaka on Friday announced it had agreed to buy the digital bank chaired by former FNB CEO Michael Jordaan for R1.1-billion.
Responding to e-mailed questions from TechCentral, Jordaan said the bank is growing strongly on its own – by between 40% and 60% a year in customers, deposits and transaction volumes – but there are administrative hurdles to overcome before the merged entity can begin delivering new products and services.
“Right now, we are focused on the various regulatory approvals: Prudential Authority, Competition Commission and exchange control. The merger projects can only start once the transaction becomes unconditional,” said Jordaan. “We are happy to have created a South African unicorn and to be listed on the JSE and Nasdaq.”
Bank Zero is, however, keen to partner with fintechs, like those in Lesaka’s stable, allowing them to offer banking services to their customers. Global payments would allow for cross-border payment facilities, making it possible to take advantage of Lesaka’s footprint of merchant clients across Southern Africa.
Jordaan said the combination of a modern, agile bank with a low-cost distribution network is a great business model. Already, neobanks like Bank Zero are less burdened than traditional banks by legacy systems, making it less costly for them to deliver banking services to customers.
Neobanks have no physical footprint. With no branches, the cost to deliver services is reduced even further.
Partnership strategy
However, the cost benefits of an asset-light business model are counterbalanced by the lack of a physical distribution channel. Neobanks rely on digital touch points to deliver services to their customers, mainly in the form of a mobile banking app. But physical interactions are still necessary for some financial transactions, including accessing cash, that traditional banks achieve via ATM and branch networks.
Neobanks have adopted a partnership strategy to make up for their lack of physical distribution. TymeBank, for example, has business relationships with fashion retailer The Foschini Group (TFG) as well as grocer Pick n Pay.
Read: Lesaka Technologies to buy Bank Zero in R1.1-billion deal
TymeBank kiosks are available in selected TFG stores including Sportscene, Markham and Totalsports, where customers can apply for a bank account, check their balances and replace lost or stolen bank cards. Kiosks are also available at selected Pick n Pay and Boxer stores, where TymeBank customers are also able to use till points to withdraw and deposit cash.
Jordaan said it’s too early to speak about the products and services Bank Zero’s sale to Lesaka will create. A glance at the strengths of both suggests an opening for Bank Zero to strengthen its individual banking offering, especially towards lower market segments, by leveraging Lesaka’s merchant network to facilitate cash deposits and withdrawals. Coaxing merchants into opening Bank Zero accounts is also part of the bank’s strategy, said Jordaan.
“Naturally, we hope to persuade the individuals and businesses served by Lesaka to bank with Bank Zero over time,” said Jordaan.
Like other acquisitions by Lesaka in recent years, including the recently concluded R1.6-billion Adumo transaction, Bank Zero will maintain its brand identity post-deal.
“There are no plans to change the Bank Zero branding or its status as a mutual bank. Five years from now, Bank Zero, as part of Lesaka Technologies, will be a well-capitalised, profitable, fast-growing bank with a substantial consumer and business customer base and offering payments (local and global), lending and alliance banking,” said Jordaan. – © 2025 NewsCentral Media
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