3 big changes Capitec customers can expect in the coming months

Capitec is gearing up to improve and optimise its financial services, including its payment system, business banking and the recently announced mobile service, Capitec Connect.

Capitec CEO Gerrie Fourie said that the bank is moving towards being an all-around financial services company, underpinned by its recent moves into insurance, telecommunications, and business banking.

However, while the group is set on expanding and developing its current portfolio of services, it is not looking to step into more complex value propositions targeting wealthier market segments.

Fourie said that Capitec aims to create value around its clients and still aims to bank 95% of the country’s population. But he is content to leave the services for the remaining 5% – like private wealth banking and other specialised services – to other banks.

“I definitely do not see ourselves moving into private banking; I don’t see that model working,” he said.

He added that the bank is also not chasing after the zero-rated banking strategy adopted by new digital entrants, saying that banks cost money to run, and the money needs to come from somewhere.

Banks need infrastructure and IT systems, he said, and a zero-rated bank still has to recoup the money. This doesn’t come from monthly fees but rather through hiked withdrawal rates on deposits or massive penalty fees.

“We build our bank around our client’s needs at an affordable cost – not around how other banks are doing business,” he said.

Despite this, he stressed that Capitec tries to maintain affordability and treat each client – wealthy or not – the same.

In reporting its interim results for the six months ended August 22, Capitec showed staggering growth in its client base, increasing its active customer base by 13% to 19 million.

From this wide base, Fourie said Capitec wants to focus on its 5.2 million ‘quality clients’ that make use of the group’s range of products, alongside the roughly 10.8 fully digital customers.

This is what customers can expect in the coming months:

Increased lending 

Looking ahead, one of the new avenues that the company wants to explore is focusing on its lending business – specifically ‘purpose lending products‘, which are part of its current road map.

Fourie said that there is a lot happening in the housing, education and solar space, which may become points of interest for the bank.

“You will start seeing products becoming more and more prominent through our credit space,” he said.

Capitec Business changes

Capitec said that it will be rebranding Mercantile Bank to Capitec Business in the first quarter of 2023.

The group acquired the bank in 2019 and has since been aligning its systems and products within the Captiec environment.

Fourie said that the business banking segment is making good progress with the re-engineering of systems and processes and the migration to cloud computing.

Testing of the new online banking system and the remote onboarding process will start soon, he said.

New digital products and value adds

During the reporting period, Capitec implemented several digital payment solutions, including Samsung Pay and Google Pay for contactless mobile payments.

The group also launched its Live Better rewards programme, with partners including Bolt, Dis-Chem, Shell and Cashbuild.

More recently, it launched Capitec Connect as a mobile virtual network operator service on the Cell C network, offering low pre-paid data and airtime that does not expire.

Fourie said that Capitec has pumped R230 million into its digital transformation strategy, and its digital banking solutions have shifted clients away from cash transacting to digital banking.

Value-added services have expanded with the addition of national lottery ticket purchases to the already established send cash and utility payments.

By the end of October, Capitec will add bill payments to its services, which will allow clients to make instant payments to bill issuers.

Fourie said that more offerings will be unveiled in due course.

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