Lesaka Technologies Receives Approval to Acquire Bank Zero for R1.1 Billion
The Competition Tribunal of South Africa has officially approved Lesaka Technologies’ acquisition of Bank Zero for R1.1 billion ($63.8 million). The decision grants Lesaka direct ownership of Zero Research, the parent company of the digital-only bank. Although this marks a major step forward, the transaction still awaits final approval from the Prudential Authority and Exchange Control.
Bank Zero: A Digital-Only Bank Built for Low-Cost Banking
Launched in 2021, Bank Zero is a fully digital bank offering low-cost personal and business accounts through its mobile app. The bank is renowned for:
- Secure transactions powered by IBM’s LinuxONE platform
- A patented anti-fraud card
- A streamlined digital-only model that eliminates traditional branch costs
Bank Zero’s leadership will remain unchanged post-acquisition, with co-founder Michael Jordaan and CEO Yatin Narsai continuing in their roles to maintain the bank’s strategic direction.
Lesaka Expands Its Fintech Footprint
Lesaka Technologies, formerly Net1, is a South African fintech company listed on both the NASDAQ and Johannesburg Stock Exchange. The company has been expanding rapidly through key acquisitions such as Adumo and Touchsides, strengthening its presence in the payments and enterprise solutions space.
By integrating Bank Zero’s technology into a single, scalable operating system, Lesaka aims to:
- Streamline operational processes
- Enhance merchant and consumer banking services
- Improve overall financial infrastructure
- Introduce financial exchange solutions
- Expand into cross-border opportunities
- Cross-sell a wider range of banking products
Strengthening the Balance Sheet and Driving Growth
The acquisition is expected to significantly bolster Lesaka’s financial position by:
- Reducing dependence on bank debt
- Increasing lending capacity through customer deposits
- Creating opportunities for long-term revenue growth
- Enhancing lending economics across its ecosystem
What the Deal Means for Bank Zero
For Bank Zero, the acquisition presents an opportunity to:
- Accelerate expansion
- Reach a broader customer base
- Continue scaling without altering its digital-only model
The bank has recorded approximately R400 million in deposits and R415 million in card spending in 2024, reflecting steady adoption among South African consumers and businesses.
Integration Challenges Ahead
While the acquisition offers major advantages, it also brings potential challenges, including:
- Integrating multiple technology platforms
- Migrating users securely
- Ensuring uninterrupted digital banking services
- Managing risks of downtime during system transitions
A Stronger Competitor in South Africa’s Digital Banking Sector
Once fully completed, the acquisition will position Lesaka as a more dominant player in the digital banking ecosystem, enabling it to offer expanded financial services, particularly to underserved communities and small businesses.
The deal underscores ongoing consolidation in South Africa’s fintech sector, where companies are merging technology, infrastructure, and customer bases to scale digital financial services more efficiently.
