The fierce fintech race for financial loyalty in South Africa goes beyond payments

South Africa’s fintechs are competing to own the platforms through which consumers receive, move and spend money. The prize is an enduring place in consumers’ financial lives.

Digital banks, mobile operators, and remittance companies are converging on the same opportunity: making everyday transactions so convenient that customers keep returning, creating opportunities to earn revenue, collect transaction data, and sell additional services.

The next fintech battle will be won not by whoever opens the most accounts, but by whoever becomes indispensable to the daily movement of money. That requires more than an app or cheap transfers. It means developing services that customers use repeatedly to receive, hold, and spend money.

The opportunity is substantial. South Africa’s card payments alone reached R2.7 trillion ($149.4 billion) in 2024, while cash still accounted for 56% of consumer transactions by volume, according to the South African Reserve Bank’s study. For fintechs, the prize is capturing more of this everyday spending and turning it into repeat usage and sustainable revenue.

Bank Zero illustrates how this contest is changing. The app-only lender recorded its first break-even month in August 2026, five years after opening to the public. Its next phase of growth depends partly on alliance banking, which enables fintechs, retailers, and digital platforms to offer financial services on Bank Zero’s infrastructure.

The model separates the banking rails from the customer-facing brand. Partners provide customers and distribution, while Bank Zero supplies the technology that underpins their financial products.

Bank Zero has 275,000 direct customers, while its partnerships are bringing an additional 500,000 customers to its platform, though some overlap between the two groups makes its total customer reach unclear. Its partnership with Mukuru, a remittance-led digital financial services provider, demonstrates how the model can extend a bank’s reach without requiring it to acquire every customer directly.

But scale does not automatically translate into customer loyalty. Bank Zero can provide the infrastructure, yet partners may retain control of the customer experience. That makes partnership growth valuable while raising a strategic question about who ultimately owns the relationship.

Its ambitions extend to merchant payments, savings, lending and cross-border transfers. The strategic goal is to make digital wallets useful enough that customers can keep money in them and transact without repeatedly cashing out.

FNB Connect, a bank-owned mobile virtual network operator, offers another route into everyday financial behaviour. By combining mobile connectivity with banking services and rewards, it uses an existing banking relationship to connect customers with services they need throughout the day. In its latest financial year, FNB Connect and associated services recorded R28.6 billion ($1.7 billion) in customer value and sales, up 18%.

The convergence is significant because competition is no longer confined to banks and fintechs. Mobile operators can use telecommunications distribution, while banks can extend their reach through connectivity, rewards and other services. Both are seeking more frequent customer engagement.

Mukuru’s expansion beyond cross-border transfers shows why the money’s journey after arrival matters. The company built its business helping migrants send money home. Its remittance-driven neobank strategy seeks to extend that relationship by enabling customers to hold funds, make payments and access additional financial services.

In South Africa, Bank Zero provides the infrastructure behind Mukuru’s account and card offering. About 500,000 Mukuru customers are being migrated onto Bank Zero’s platform, illustrating how a remittance business can expand into banking without building its own bank from scratch.

Mukuru aims to turn periodic remittances into an ongoing financial relationship, while Bank Zero can scale by partnering with an established customer base. Both are betting that making money more useful after it arrives creates more opportunities to serve customers.

The challenge is converting that proposition into repeated use. If customers still withdraw their funds immediately or use competing services for everyday purchases, the opportunity to build a broader relationship remains limited.

Payments carry technology, compliance, and customer service costs, while free transfers do not necessarily generate sustainable profits. Providers need additional revenue streams without weakening the value proposition that attracts customers.

A wallet becomes more useful when customers can pay at shops, settle bills and transfer money across providers easily and affordably. That requires reliable infrastructure, broad merchant acceptance, and interoperability, rather than simply a large number of registered users.

Rushana Pillay, a Master of Management graduate in Digital Business from Wits Business School, identifies the barriers to everyday digital payments in her 2025 research paper, Factors that impact the adoption of real-time electronic payments in South Africa. Her findings highlight high transaction costs, fragmented industry collaboration and limited payment interoperability as obstacles to adoption. For fintechs, winning everyday spending means making digital payments affordable, seamless and widely accepted enough to compete with cash.

Established banks have an advantage in customer trust and payment networks, while newer entrants must offer compelling reasons for customers to change their financial habits. Partnerships can accelerate growth, but reliance on another institution’s infrastructure can limit control over the customer relationship.

The key question for investors and operators is whether customer growth translates into frequent transactions and sustainable revenue. Account numbers measure scale, but habitual use and merchant acceptance reveal whether a platform has become part of consumers’ everyday financial lives.

The businesses that turn distribution into profitable, recurring payments will be better positioned to retain customers, grow revenue and justify further investment.

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