Regulatory Approval Pending
Lesaka Technologies, which previously operated as Net1, has decided to extend the timeline for finalizing the purchase of digital lender Bank Zero. The company is yet to receive the green light from the Prudential Authority of the South African Reserve Bank. Initially disclosed in June 2025, the acquisition was expected to conclude by June 2026. Nevertheless, both companies agreed to delay the finalization to ensure all necessary approvals are obtained. This pause indicates no significant issues with the merger itself, as the South African Competition Commission endorsed the deal in November 2025, a decision later upheld by the Competition Tribunal. The remaining hurdle is obtaining prudential approval to complete the process. Under the deal’s specifics, Bank Zero’s shareholders are poised to receive about 12% of Lesaka’s diluted shares, along with a cash sum up to ZAR91 million.
Strategic Significance of Bank Zero
For Lesaka, the purchase of Bank Zero signifies a pivotal move in transitioning into a comprehensive financial services entity. In recent years, Lesaka has aggressively pursued expansion through acquisitions, notably acquiring the payment solutions provider Adumo in 2024. Integrating Bank Zero would grant Lesaka a coveted banking licence and digital platform, facilitating the funding of lending operations via customer deposits as opposed to relying heavily on wholesale channels.
An Overview of Bank Zero
Bank Zero, founded in 2018 by former First National Bank leader Michael Jordaan and banking expert Yatin Narsai, launched in 2021 as a digital-only banking initiative focused on cost-effective, app-based services with robust security. Despite its innovative approach, it faced challenges in scaling to match competitors like TymeBank and Discovery Bank. By 2025, Bank Zero maintained over 40,000 funded accounts and had amassed deposits nearing ZAR400 million.
Implications for South Africa’s Financial Industry
This merger exemplifies the growing synergy between fintech and traditional banking within South Africa. Bank Zero introduces a banking licence and technological infrastructure, whereas Lesaka brings additional payment solutions, lending options, merchant connections, and a substantial customer base. Industry analysts view this merger as potentially empowering a formidable rival to the entrenched banks in the market. The ongoing anticipation for regulatory approval signals steadfast commitment from both parties to see the transaction through, rather than a faltering of the agreement process. This situation is reminiscent of how digital platforms in Africa are revolutionizing financial services.