Old Mutual, a South African challenger bank that secured regulatory approval to set up a bank in 2024, has launched its digital-first banking product, OM Bank, to take on Capitec in South Africa’s mass-market banking space. The rollout has begun with Money Account users and early sign-ups, invited to switch to the new app. A full product launch is expected by year’s end.
Between the lines: OM Bank is pitching itself with quick sign-ups, budgeting tools, up to 10% credit card rewards, savings rates of 7.23%, and a monthly account fee of just R4.95 ($0.28). Customers can still use their Money Account until 2026, but Old Mutual is clear: OM Bank is the future.
State of play: The bigger story is competition. Capitec has long dominated the banking market with simple, low-cost products to South Africans earning between R5,000 ($283) and R80,000 ($4,523) a month.
Old Mutual is targeting the same segment, but with deeper pockets and 3.1 million existing customers. It has already spent R2.8 billion ($158 million) building the bank and expects to incur losses until at least 2028. Yet the bank says it can turn a profit by 2026, betting on a digital product in a market already familiar with digital payments.
This could be good news for retail customers. More competition usually means lower prices, bigger rewards, and banks working harder to keep customers loyal. But OM Bank still has to prove itself in a market where trust, simplicity, word of mouth, and strong security matter most, especially in South Africa’s payments space, where scams are a dime a dozen.
