Shoprite launching new debit cards with South Africa’s most exclusive bank
Shoprite has entered into an agreement in principle with Investec to establish a banking partnership, expanding the financial services offered by South Africa’s largest retailer.
Part of the agreement would involve Shoprite offering expanded transactional accounts with Investec acting as the banking sponsor.
“Investec will become the banking sponsor for an expanded transactional account offering from Shoprite Financial Services, including the introduction of a debit card,” the companies said in a joint statement.
“The enhanced offering is expected to provide customers with greater payment flexibility, improved security and access to a broader range of digital and everyday payment solutions.”
The partnership between the two companies will involve Shoprite providing client-facing services while leveraging Investec’s existing banking infrastructure.
This would mean that Shoprite can enter the transactional banking industry without establishing its own infrastructure or obtaining a separate banking license.
“Shoprite Financial Services will provide the customer-facing proposition through the Group’s brands, stores and digital channels, while the partnership leverages Investec’s banking infrastructure, balance sheet, regulatory capabilities and banking licence,” the companies explained.
“This structure will enable Shoprite Financial Services to expand its transactional offering without establishing a separate bank and allow Investec to extend the reach of its existing capabilities into new markets and client segments.”
The companies also clarified that this partnership was non-exclusive and would not replace Shoprite’s existing partnerships with other banks.
Shoprite CEO Pieter Engelbrecht said the partnership would greatly expand the company’s fintech offerings for customers.
“By combining our reach with Investec’s banking expertise, we can expand access to simple and convenient fintech solutions that give South Africans greater choice and control over their money,” he said.
Investec Group Chief Executive Fani Titi said the deal benefits the company by giving it access to new markets.
“It enables Investec to access new markets, allowing us to scale our established financial services capabilities while remaining focused on our existing target market,” he said.
“Furthermore, it creates an opportunity to deepen our participation in South Africa’s evolving payments ecosystem and broaden our access to retail deposits.”
The South African Reserve Bank has previously noted that utilising retailers for cash transactions is the most efficient way to handle cash.
In its cost-of-cash report, the central bank found that retailer cash-back was the most cost-efficient way to process transactions.
It said retailers are “the most cost-efficient channel due to leveraging existing retail infrastructure and high-transaction volumes.”
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