Bloomberg reports that Pepkor Holdings Ltd. acquired a financial technology software platform last month to support its expansion and is in talks with Investec to launch a new venture, likely to be called “Pep Bank,” with profits expected to be shared between the retailer and the lender, which focuses on high-net-worth clients in South Africa.
The move positions it alongside other major South African retailers, including Shoprite Holdings Ltd., that are leveraging consumer data from loyalty programs to offer financial services to roughly one-sixth of South Africans who either have no bank account or are under-served by traditional lenders.
“We continue to build a unique position of trust among millions of our customers,” said Chief Executive Officer Pieter Erasmus. “Our strategic focus on digital inclusion and fintech has added scalable future growth opportunities that are now delivering tangible results.”
Retail and fintech expansion drives growth
Revenue from the retailer’s fintech unit rose 31% to 16.6 billion rand ($961 million) in the year through September, accounting for 17% of total sales.
Pepkor operates over 6,000 stores and sells mobile devices while offering financing through both its Pep and Ackermans brands.
Earlier this month, it further expanded its footprint through a R1.7 billion acquisition of Retailability, adding 462 stores across South Africa, Botswana, Lesotho, Namibia, and Eswatini.
The expansion deal, which represents less than 2% of the retailer’s market capitalisation, will be settled in cash and is expected to close in the first quarter of FY26, pending Competition Commission approval.
Expanding the store network not only increases physical reach but also allows for the integration of additional revenue streams, including financial services, loyalty programs, and supply chain efficiencies.
The retailer’s stock rose as much as 3.8% in early Johannesburg trading, marking its largest intraday gain in over three weeks, despite a 10% year-to-date decline compared with a 24% drop in the FTSE/JSE Retailers Index.
With its combined focus on retail growth and fintech innovation, Pepkor is increasingly blurring the line between shopping and banking, creating new opportunities for lower-income consumers while redefining the country’s retail landscape.
