South Africa’s third biggest bank, Capitec has quietly launched its credit card offering nationwide.
The bank has shown massive growth in its operations over the past few years , with millions of new clients being drawn to the bank for its simplified and more affordable service offerings.
More than 29% of the banked population uses Capitec as its primary bank (Nielsen, 2017).
Capitec entered the South African market aimed at lower-income markets, but over time has drawn in the middle market with competitive rates and broader service offerings. Now the bank has the higher income market in sight, as it prepares to launch a credit offering, while not deviating from its ‘one account’ culture.
The credit offering first surfaced in mid-to-late 2016, when the bank launched a limited trial in the Western Cape at 150 branches in the province.
According to Capitec chief executive Gerrie Fourie, the reason the service was restricted was because the facility is tied directly into the bank’s Global One systems, so system strain had to be tested.
“If you’re servicing 7.8 million or 7.9 million, system stability is very important. We just wanted to launch it in the Western Cape and make certain that we have system stability,” the executive said at the time.
The bank quietly launched its offering nationwide in October 2016 without much fanfare, but is gearing up to launch a national marketing campaign to push the product in earnest.
What you need to know
The bank’s new credit offering will link directly to the Global One account – the only account the bank offers – meaning all accounts can be accessed with one card.
It gives clients access to six linked accounts, including a credit facility, a transactional account and four client-defined savings plans.
It carries a once-off R100 initiating fee, and a maintenance fee of R50 per month. The initial maximum limit for the offering is R50,000 – which will change once the product grows.
The credit card will offer up to 55 days interest-free purchases (with a minimum monthly repayment required of 5% of the outstanding amount), and interest rates will vary between 15% and 21% based on an individual client’s credit profile.
The card will also give clients access to other widely-used credit card services – such as:
- Secure online purchases with MasterCard SecureCode,
- Cashless payments (zero fees worldwide at card machines, online and for telephone and mail orders) and
- No currency conversion fees for international payments.
Because the credit facilities are attached to the Global One account, the same sign-on policies stand – prospective clients will have to apply in-branch so that their biometric data can be captured.
To apply for the bank’s credit card, however, clients must provide the following documents:
- Original identification document (must be 18 years or older);
- Original proof of residential address (e.g. municipal rates and taxes account in your name with your street address, not older than 3 months);
- Latest salary slip; and
- Stamped bank statement showing your latest 3 salary deposits.
There is currently no specified minimum salary requirement for the account, but this is subject to change as the product continues to evolve. Right now, successful application is based on an income and affordability check conducted by the bank.
It is also worth noting that those who declare themselves as ‘self-employed’ may not be eligible for the product.
Fourie told City Press that within five years, the bank hopes to up its credit card book to R10 billion, or 10% of the local R100 billion credit card book market.
