What’s more, ‘Pep Bank’ would offer zero-fee banking services across South Africa.
According to Bloomberg, the retailer aims to use its vast national footprint of roughly 6 000 stores to reach millions of low-income consumers who remain underserved by traditional banks.
The new offering from Pep is expected to operate under the name Pep Bank, with Pepkor and Investec in discussions about a potential partnership.
While negotiations are still underway, insiders say the two companies would likely share profits from the venture.
Investec, better known for catering to high-net-worth clients, has been looking for new growth avenues as South Africa’s economy continues to struggle.
Pep Bank to use existing data on customers
Locating Pep Bank branches inside Pepkor’s existing outlets would allow the retailer to expand rapidly and capture customers who already shop at Pep, Ackermans and its other discount chains.
Pepkor would also be able to tap into extensive data collected from customers, to craft banking products tailored to the needs and financial habits of lower-income households.
The move comes as competition intensifies in South Africa’s consumer banking market. Capitec, the country’s largest lender by customer numbers, continues to post record profits on the back of strong demand from lower-income earners.
Retailers are also muscling in: Shoprite and others are increasingly using loyalty-programme data to offer financial products to the roughly 17% of South Africans who remain unbanked or who are under-serviced by traditional lenders.
Basic financial services are already a key revenue driver for many retailers.
Pepkor’s Fintech division, which handles money transfers, bill payments and cash withdrawals, grew revenue by 35% to R7.9 billion in the six months to March – representing 16% of the group’s total sales.
