South Africa’s discount-retail empire, Pepkor Holdings Ltd, is preparing a dramatic shift into banking, armed with a fresh Section 13(1) licence from the Prudential Authority and a distribution footprint unmatched by any financial institution in the country.
For a group with 5,800+ stores and 30 million customers, most of them low-income and thin-file borrowers, this is a calculated offensive to capture a slice of the R10 trillion banking market by weaponising retail scale.
Pepkor’s ambitions crystallised in November 2025 with its preliminary banking approval, setting the stage for a March 2026 blueprint reveal that insiders say will hinge on zero-fee accounts, in-store service hubs, data-driven lending, and a cloud-native core banking engine from its recent Cloudbadger acquisition.
The Empire Builders: Retail Dominance Meets Financial Ambition
Pepkor, unbundled from Steinhoff in 2015 and now South Africa’s largest apparel and discount retailer through brands like PEP, Ackermans, Tekkie Town, and Flash, has interacted with financial services for years.
Its Flash platform already channels R60 billion in annual informal trader turnover, offering bill pay, wallets and microinsurance to the cash-heavy segments banks often underserve.
FY2025 delivered the confidence boost: group revenue climbed 12% to R95.3 billion, HEPS rose 14.8%, and fintech operations surged 31.1%, driven by a spectacular 61.4% rise in financial services.
CEO Pieter Erasmus has made no secret of the company’s intention to turn that momentum into a banking beachhead.
The October 2025 purchase of Cloudbadger, an API-ready, real-time core banking platform brings the technical horsepower to make that pivot viable.
“The platform we acquired, and the team that comes with it, is a key ingredient to developing this opportunity,” Erasmus said, framing the bank not as a side project but a strategic evolution of Pepkor’s retail ecosystem.
The Licence Lowdown: Section 13(1) Opens the Vault
South Africa’s Banks Act doesn’t hand out banking rights lightly. A Section 13(1) licence authorises Pepkor to form a bank and begin controlled setup activities while it awaits a full Section 16 registration, expected in mid-2026.
The process comes with heavy capital minimums (R250 million to start, likely rising toward R500 million), strict AML/CTF regimes and stress-test scrutiny as the country navigates stubborn inflation and a 5.5% repo rate.
Pepkor has the firepower: R11.1 billion in operating profit and a cash position strengthened by a string of 2024–2025 acquisitions, including Legit (469 stores). Capital is not the obstacle. Compliance is.
The Playbook: Zero Fees, Storefront Branches, and Retail Data as Collateral
While Pepkor plans to reveal full details in March 2026, the strategy already has taken shape. The bank internally dubbed “Pep Bank” will launch as a digital-first challenger powered by hundreds of physical onboarding hubs across new and refurbished stores.
With millions of daily footfalls, Pepkor can do what app-only rivals can’t: merge banking with retail in the customer’s existing routine.
The model leans on zero-fee transacting, instant micro-loans priced off behavioural and purchase patterns, savings yields, and embedded insurance, supported by Cloudbadger’s event-driven core.
Pepkor’s footprint gives it a distribution edge: customers can open accounts, cash in/out, and resolve issues in-store an advantage in regions where the big four banks have pulled back physical branches.
| Feature | Pepkor’s Edge | Versus Rivals |
|---|---|---|
| Distribution | 5,800+ stores serving as de facto branches; app for urban users | Capitec’s 800 branches; FNB’s digital-heavy model with rural gaps |
| Pricing | Zero-fee basics; lower-cost lending via retail-data scoring | TymeBank’s free accounts; Absa/FNB fees of 3–5% on many services |
| Products | 4–6% savings; micro-loans from R1,000 to R50,000; Flash-linked remittances | Shoprite’s Xcelerate cards; Nedbank’s SME-focused lending |
| Data Advantage | Insights from 13.5M handset sales + millions of retail transactions | Standard Bank’s big-data muscle, but less granular low-LSM retail detail |
Early speculation suggested a possible partnership with Investec for backend rails, though the bank has publicly dismissed the reports as “speculative.”
Pilot rollouts are expected in Gauteng and the Western Cape during Q2 2026, with internal targets of 1 million accounts by FY2027.
READ ALSO:What to Expect If Revolut Becomes a Fully Licensed Bank in South Africa
Battlefield Banking: Retailers vs. Incumbent Titans
Pepkor isn’t walking into an empty arena. South Africa’s retail-to-banking evolution has accelerated: Shoprite integrates banking into its Sixty60 ecosystem; Pick n Pay co-owns TymeBank (now 13 million customers); and fintech super-apps like OPay chase cash-heavy segments with aggressive rewards.
The incumbent banks, comprising FNB, Absa, Standard Bank, and Nedbank, still control 80% of total banking assets.
Yet they struggle with trust and accessibility in low-income communities, leaving a gap Pepkor is uniquely positioned to exploit. Its visibility in townships, transport hubs and rural shopping corridors gives it something no bank can match: cultural proximity.
Market advantages help: nearly 40% of adults remain unbanked or underbanked, and South Africa’s digital payments volume is forecast to grow to R200 billion by 2028.
Pepkor’s retail intimacy and behavioural data could shave lending rates by 20–30%, undercutting Capitec’s 15% average personal-loan pricing.
Pepkor’s banking push is a full-scale assault leveraging unmatched store density, trusted retail brands, and an AI-ready banking core.
With March 2026 set for the official reveal, expect a campaign built around zero fees, hyper-local onboarding, and data-driven credit aimed squarely at the country’s low-income majority.
If executed cleanly, Pepkor could capture 5–10% market share by 2028, adding R5 billion+ in new revenue streams and redrawing the contours of South Africa’s retail-bank convergence.
Pepkor Overview
Investors tracking the Pepkor share price often look beyond the numbers to understand the scale of the retailer’s ecosystem, from the Pepkor group brands and wide-ranging Pepkor subsidiaries to its growing digital footprint.
Consumers frequently use the Pepkor login through the Pepkor portal to access services linked to the group’s retail network, while shoppers explore Pepkor stores online to view deals across the chain.
Many still ask, “Which stores belong to Pepkor?” a portfolio that includes fashion, furniture, speciality, and telecom brands, with Pep stores’ online catalogue searches remaining among the most popular.
And as questions such as “Who owns Pepkor?” trend among market watchers, the retailer’s expanding online presence continues to shape its position in South Africa’s retail and fintech landscape.
Ronnie Paul is a seasoned writer and analyst with a prolific portfolio of over 1,000 published articles, specialising in fintech, cryptocurrency, climate change, and digital finance at Africa Digest News.
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