Capitec expands into SME payments market with R400 million Walletdoc acquisition

Capitec Bank Holdings has entered into an agreement to acquire 100% of Walletdoc Holdings for R400 million, a move to contest the fast crowding SME payments space.

Walletdoc Holdings' fully owned subsidiary Walletdoc, established in 2015 by founders Leonard Shenker and Dan Wagner, is a South African fintech company providing scalable, innovative payment gateway solutions for merchants, including online and in-app payments, digital wallets, Instant EFT, payment links, and real-time payouts. Other players in the SME payments space include Yoko and Nedbank.

South Africa's biggest bank by customer numbers said Monday in a statement that Walletdoc's culture of innovation, efficiency, and client focus was closely aligned with the bank's core values.

Capitec has historically lagged in the business banking space and is working hard to grow into this gap. An online search shows it marked its entry into the market by acquiring Mercantile Bank in 2019. Since then the bank has focused on selective fintech and digital ecosystems investments rather than large scale acquisitions,

"This acquisition is a strategic step in Capitec's ongoing commitment to lower the cost of payments, broaden access to digital financial services, and promote financial inclusion in South Africa," the bank said.

The purchase price comprises a R300m cash payment and a deferred earn-out of R100m, linked to the Capitec share price and payable in cash over three years, subject to the achievement of certain milestones over that period. The transaction is subject to regulatory approval.

"Capitec believes in the power of innovative technology to deliver smart, seamless payment solutions that benefit both merchants and consumers. We are committed to making financial services more accessible and affordable for all South Africans, and we see this acquisition as an important step in building a more inclusive and competitive payments ecosystem," Capitec's directors said.

Capitec's share price fell 0.36% to R4 010.45 Monday afternoon on the JSE, barely changed from R4 026.11 a year ago.

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