Capitec, with a market cap of R336 billion, next month aims to further disrupt the business banking. Photo: Matthew Jordaan
Capitec, with a market cap of R336 billion, has plans to further disrupt the business banking landscape with new low-cost packing of its point of sale card machine sales.
The bank is targeting growth of its business banking division, predominantly via the small, medium enterprise sector (SME).
Capitec, which already offers card machines and has 22 million clients, 11.2 million whom are digital, is upping the ante by launching a through-the-line campaign from September 1 by launching three card machine packages with no hidden costs.
Currently customers using the card machines “pay as little as 0.85% on card transactions with free next day settlements,” it said on its website.
Capitec CEO Gerrie Fourie told a media briefing yesterday that its merchants would initially have to buy the card machine and not rent it.
"We want to run a really big campaign from September 1, because we feel that we've got to get cost effective devices out there and we need to look at the commission rates that everyone's paying in this industry, because in our view, it's way too high,“ he said.
“The vast majority, roughly 90% of transactions, are debit card transactions. And typically, the competitors that play in this market for small businesses, easily charge 3% commission on every single round that goes through that device, and that is why people go cash, because that's too expensive,” he explained.
The move comes as Capitec strategically expands its business banking footprint.
This is also after Mercantile Bank was rebranded to Capitec Business in the 2024 financial year, delivering a 23% increase in profit after tax to R478 million. The bank implemented a new online banking platform, moved to a single Capitec app for business and personal banking, and implemented cloud-based banking, CRM and lending solutions.
On March 1 the bank introduced new pricing for business transaction fees, reducing its pricing to a flat R50 monthly fee, regardless of the size and format of the business.
Fourie said, “At the end of the day we want to try to move cash out of the system. And the only way to do this is to be able to get devices into the hands of small businesses. The whole idea is, we want to get these customers to bank with us, so we can get data, and you can lend money to help them grow their business, to create jobs.”
He said currently the banking activity from SMEs on their platform was around 80 000 clients, which Capitec wanted to grow.
“We feel this big opportunity. I think it's important to highlight that this is not the whole business. Bank strategy, including the merchant strategy, is not just about winning market share from competitors, but it's actually growing.
“If we can do that for the emerging market, where people are still heavy on cash, and we can get into digital then we can start to understand their behaviour, can start lending money to them, and that funding helps them grow,” he said.
Capitec’s share price has surged 38% in the past six months, 74% in a year and 163% in five-years. By 4.20pm yesterday the share on the JSE was 2.07% lower at R2830.48 on the JSE.