Capitec’s proposed acquisition of South African payments fintech Walletdoc has moved a step closer after the Competition Commission recommended approval of the deal, subject to conditions aimed at protecting competition in the country’s digital payments market.
The transaction still requires final approval from the Competition Tribunal, with the conditions only taking effect if the acquisition is formally approved.
Capitec Pay Must Remain Open to Rivals
As part of the proposed conditions, Capitec will be required to allow competing payment service providers (PSPs) to access its Capitec Pay platform, provided they meet the necessary technical and commercial requirements.
The bank will also be prohibited from using confidential business information obtained through rival payment providers to gain a competitive advantage.
In addition, Capitec has agreed not to give preferential treatment to its own Capitec Pay platform over PayShap Request or South Africa’s Rapid Payments Programme infrastructure, unless differences are based on objective factors such as system rules or security requirements.
The Competition Commission said the acquisition could place Capitec on both sides of the digital payments ecosystem.
While Capitec already operates its own payment platform through Capitec Pay, acquiring Walletdoc would also give the bank ownership of a payment service provider that competes with other businesses using the same payment infrastructure.
The conditions are intended to ensure fair access to the platform and prevent anti-competitive behaviour in South Africa’s rapidly growing digital payments sector.
Strengthening Capitec’s Payments Business
Walletdoc, founded in 2015 by Leonard Shenker and Dan Wagner, provides payment gateway technology, merchant payment services and e-commerce payment solutions. The company supports multiple payment methods, including bank transfers, card payments and PayShap.
Capitec announced the acquisition in December, agreeing to pay R300 million upfront, with a further R100 million linked to future performance targets.
The Competition Commission said the transaction does not raise significant public interest concerns.
If approved by the Competition Tribunal, the acquisition is expected to strengthen Capitec’s position in South Africa’s fast-growing digital payments industry while ensuring rival payment providers continue to have fair access to key payment infrastructure.
Main Image: Moneyweb
