Major international bank heading to South Africa
The London-based digital bank is going to create competition for local digital banks.
BusinessTech reports that Revolut, a banking and payment service, will be making its way to SA.
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Revolut was launched in 2015 and has grown to 65 million customers worldwide and over 500,000 business customers globally.
The London-based bank recently opened its global headquarters in London and has announced plans to apply for a full banking licence in SA.
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This will be its first move to Africa and challenge local digital banks such as Bank Zero, Discovery Bank, and TymeBank.
Chief executive and co-founder Nik Storonsky has big plans for the company.
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Their goal is to serve 100 million customers by mid-2027 and expand into more than 30 markets by 2030.
According to Storonsky, Revolut has adjusted its international strategy after early attempts to enter markets were not as successful without full banking licences, which led to limited services.
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The company previously pursued smaller approvals, such as e-money or payment licences, but this resulted in "a worse product."
Storonsky says the new approach will be acquiring an existing bank or obtaining full banking licences.
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Jacques Meyers, Revolut South Africa's CEO, believes the country is ready for new competition in the banking sector.
The market is primed for disruption, and we see a clear opportunity to bring our product expertise and customer-first approach to a country that is hungry for innovation.
Revolut will join the three home-grown digital banks that are competing with big traditional banks.
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As reported by BusinessTech:
- TymeBank focuses mainly on lower-income customers and has grown steadily. As of the end of 2024, it was valued at approximately R26.7 billion.
- Discovery Bank, backed by insurance group Discovery, targets higher-income clients and reached one million customers by September 2024.
- Bank Zero has been building its presence since its launch. Lesaka Technologies recently moved to acquire the group in a deal worth R1.1 billion.
It's been observed that Revolut typically performs strongest in middle- and upper-income markets, the same group as Discovery Bank.
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Revolut states that South Africa is seen as a strategic market, in its own right, as well as a possible entry point into the rest of the African continent.
If Revolut successfully acquires a banking license in SA, it will launch a complete banking offering, which could include services such as accounts, loans, and investments.
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