Capitec’s biggest enemy

Cash is Capitec’s number one enemy as it prevents the bank from getting its hands on valuable data on how its clients use their money, which enables it to personalise offerings and enhance the client experience. 

Capitec produced strong results for the first half of the 2025 financial year, with headline earnings up 36% and its credit loss ratio declining to 7.6%. 

It attributed this to the hard work done over the past five years to build Capitec’s ecosystem and offer an expansive range of services. 

In particular, the bank invested heavily in developing its digital channels as part of its plan to create a financial services platform. 

“During the tough economic times since 2020, the group invested in data platforms, systems and technology, and people to provide scalability and agility and better understand our client’s needs so that we could deliver on them and help them live better,” the bank said. 

“As we increase volumes through our ecosystem, the incremental cost per transaction decreases, allowing us to unlock value for our clients.”

Apart from the ability to reduce the cost of transacting on its platform, another benefit of this significant investment is the immense data it generates, which the bank can then use to enhance its offering. 

One stumbling block to this is the high reliance on the use of cash in the South African economy, particularly among the lower-income segments that Capitec serves. This makes it enemy number one for the bank. 

“Our number one enemy is cash. Why is it number one? Because when you withdraw R1,000, I do not know what you do with it. The moment you do it via a card or a digital channel, I know exactly what you are doing with it,” CEO Gerrie Fourie said. 

The transactions conducted through digital channels generate valuable data that the bank can use to provide services targeted to its clients’s needs and enhance their experience. 

Fourie said it is also natural that with technology, people increasingly use digital means to transact, with cash and branch transactions making up only 11% of Capitec’s total. 

This is down from 13% a year ago. The bank’s clients conducted around 320 million cash and branch transactions in the six months to the end of August. 

In comparison, they conducted 1.3 billion transactions using cards and 92 million using PayShap or Capitec’s Pay to Cell offerings. 

Capitec Pay is also taking up a growing share of transactions conducted through the bank, with 95 million taking place on this platform. 

The comparison between cash and branch transactions with Capitec’s digital channels is shown in the graph below. 

Capitec Connect

An increasingly important part of this strategy from Capitec is its Capitec Connect mobile virtual network operator (MVNO) offering. 

This not only gives the bank to even more data, but the MVNO is also growing strongly and contributing to net income. 

In the past six months, the first half of the bank’s 2025 financial year, Capitec Connect contributed R69 million in net income. This is a sharp jump from the R4 million it contributed in the prior comparable period. 

As of August this year, Capitec Connect had reached 1.2 million SIMs, of which 50% generated revenue within the past 30 days.

The MVNO also revealed data usage figures for the past three half-year periods, with usage reaching 5.1 petabytes in the half-year ended August 2024.

The data usage figure is up from 1.4 petabytes in the same period the year prior.

Capitec Connect forms part of what the bank refers to as its value-added services (VAS), which are complimentary to its banking offering and are intended to form a complete ecosystem of financial services. 

This segment of their business grew its net income by 73% to R2 billion and, again, gives the bank extremely valuable data to target new products at its clients’ needs. 

An example of the data being used to inform decisions regarding new products was the launch of Capitec’s partnership with Showmax, which the bank will expand to DStv Stream later this month. 

Since launching on 13 August 2024, Capitec has sold 47,387 Showmax vouchers. This product was targeted based on the bank’s data on where its clients spend their money every month. 

This also informed its expansion to DStv Stream, which Fourie is very excited about and will offer its clients good value. 

“The one I am excited about is DStv Stream. Where I will not have to buy the entire DStv package and pay R1,000, but I can go in and pay for what I want. That is going to be quite exciting and create value for clients,” he said. 

Another example of a data-driven product offering is Capitec’s licence disc renewal service, which has facilitated 174,050 disc renewals since 22 February 2024.