The Competition Tribunal of South Africa has approved Lesaka Technologies’ acquisition of Bank Zero for R1.1 billion ($63.8 million). The approval grants Lesaka full control of Zero Research, the holding company behind the digital-only bank. While this is a major regulatory milestone, the deal still requires clearance from the Prudential Authority and Exchange Control before it can be finalized.
A Look at Bank Zero’s Digital-Only Model
Founded in 2021, Bank Zero operates entirely online, offering affordable personal and business banking via its mobile app. The bank is recognized for:
- Secure transaction processing powered by IBM LinuxONE
- A patented anti-fraud debit card
- A cost-efficient, branchless operating structure
Following the acquisition, Bank Zero will retain its leadership team, including co-founder Michael Jordaan and CEO Yatin Narsai, ensuring continuity in strategy and operations.
Lesaka Continues Its Fintech Expansion
Lesaka Technologies, previously known as Net1, is listed on both the NASDAQ and JSE. The fintech company has grown aggressively through acquisitions such as Adumo and Touchsides, strengthening its footprint in payments, merchant solutions, and digital finance.
With Bank Zero under its umbrella, Lesaka intends to merge its systems into one unified, scalable platform to:
- Improve operational efficiency
- Expand banking products for merchants and consumers
- Strengthen its technology infrastructure
- Introduce financial exchange capabilities
- Pursue cross-border digital finance opportunities
Financial Strengthening and Growth Prospects
The acquisition is designed to reinforce Lesaka’s financial structure by:
- Lowering reliance on bank borrowing
- Increasing lending capacity through Bank Zero’s deposits
- Enhancing long-term revenue potential
- Improving lending margins across its ecosystem
What the Acquisition Means for Bank Zero
For Bank Zero, the partnership presents an opportunity to scale faster without changing its digital-first identity. The bank has already built momentum, reporting R400 million in deposits and R415 million in card spend in 2024, with its customer base continuing to grow.
Integration: Opportunities and Challenges
Lesaka will face several integration hurdles, including:
- Merging different technology environments
- Managing secure customer migration
- Ensuring data protection and system stability
- Minimizing service disruptions during the transition
A Boost to South Africa’s Digital Banking Landscape
Once finalized, the acquisition will significantly strengthen Lesaka’s position in South Africa’s digital banking sector, enabling broader offerings for underserved consumers and SMEs. It also highlights the increasing consolidation within the country’s fintech market as companies combine resources to scale digital financial services more effectively.
