Shoprite has been steadily expanding its financial services capabilities in recent years—yes, Shoprite! The retail giant is now positioning itself to dominate peer-to-peer money transfers as a stepping stone toward a full-scale challenge to South Africa’s established banking sector.
The retailer’s journey into financial services began in 1998 with the launch of its Money Market account, which evolved into a fully-fledged bank account in 2020. Shoprite claims this is South Africa’s most affordable entry-level bank account, attracting over four million customers since its introduction.
This account serves as a digital extension of Shoprite’s Money Market counters, available in most Shoprite and Checkers stores. These counters act as financial hubs where customers can pay bills, receive grant payments, send vouchers and cash, and purchase airtime, data, and prepaid electricity. More recently, Shoprite partnered with OUTsurance to offer funeral and pet insurance at these counters, further diversifying its financial services portfolio.
Money Transfers: The Growth Engine
A major driver of Shoprite’s financial services growth has been money transfers between individuals, facilitated through its bank accounts and Money Market counters. According to Jean Olivier, Shoprite’s Head of Financial Services, the biggest challenge for many customers is safely transferring money to family or friends within South Africa or across borders—especially for those without traditional bank accounts.
This use case forms the backbone of Shoprite’s financial services strategy, creating a powerful entry point to attract unbanked and underbanked South Africans into its ecosystem. With over 2,800 retail stores serving as send-and-receive points for cash, Shoprite leverages an extensive physical footprint that often represents the only safe payout option in remote communities.
Banking Ambitions
Shoprite has kept its banking plans under wraps until recently. Following its latest results, CEO Pieter Engelbrecht confirmed the company’s intention to compete more aggressively in financial services:
You are going to see us enter the banking world. We already have a banking account, which we have not started marketing. The account will be the only zero-cost bank account in the country. We are definitely going to enter the financial services area more aggressively.
Financial services represent a key growth pillar for Shoprite, offering higher margins than traditional retail and unlocking access to customer spending data—a valuable asset for tailoring products and services.
Shoprite’s Money Market account, launched in 2020, charges no monthly fees and zero transaction fees, with only a flat R5 withdrawal fee. This unique offering has grown rapidly, serving four million customers and processing over 653,000 transactions per month. From September 2023, grant beneficiaries have been able to switch their payments to this account free of charge, further boosting adoption.
Future Outlook
Shoprite continues to expand its financial services portfolio, adding products like funeral cover and pet insurance, and sees significant potential in this space. Engelbrecht noted that while the business is still in its infancy, it is growing steadily.
Although Shoprite does not aim to challenge Capitec’s dominance, Engelbrecht hinted at possible partnerships, given the large overlap in customer bases.
Shoprite stated in its latest integrated annual report.:
We have been building and rolling out low-cost digital and financial services, focusing on the unbanked and underbanked population. Through these services, we have become a one-stop shop for customers who can conveniently undertake various financial transactions, both in-store and online.
