When Nedbank, one of South Africa’s largest banks, announced that it had agreed to acquire iKhokha for about R1.65 billion (over $93 million) on August 13, the news was not just the price tag that drew attention; it was what the deal represented. A thirteen-year-old fintech startup, built in Durban to serve the needs of South Africa’s small and medium-sized enterprises (SMEs), was about to be folded into one of the continent’s oldest and most traditional banking institutions.
Nedbank’s acquisition of iKhokha is part of the lender’s strategy to strengthen its digital offering and SME banking edge. By combining mobile payment technology from iKhokha with the scale of Nedbank, the deal aims to give small businesses better tools, financial inclusion, and extend Nedbank’s reach.
Matthew Putman, co-founder of iKhokha, told that the answer to what comes next is growth, not just integration into a big bank. “The business will continue to run as per normal,” he said. “We will be a wholly owned subsidiary of Nedbank, but we will keep our brand, our staff, and our independence. For our merchants, nothing changes, except that now we have a big brother and new opportunities to expand what we offer.”
Pricing and product shifts are still off the table until after regulatory approvals are completed, but Putman says the focus is more on expanding services rather than changing existing ones.
“The things our merchants love—our ease of onboarding, the products, the level of care—none of that will change,” he said. “If anything, they will gain access to more products and services on the back of Nedbank’s capabilities. This is very much a growth story.”
Acquisitions often come with fears of culture clashes, brand erosion, and loss of entrepreneurial edge. In Canal+’s takeover of Multichoice, local creators feared the shifting of African roots and reduced support for African content. But Putman says Nedbank made it clear that they value iKhokha’s unique identity and the brand would remain intact.
“The Nedbank leadership team was very clear in communicating that they respect what we have built, our platform, our brand, our way of serving merchants,” he said. “They are not looking to change our successful formula. If anything, they want to invest in the growth story, capitalising on iKhokha’s unique brand positioning in the SME market.”
iKhokha will continue to operate under its name, led by the same executive team. Its staff remain in place, as does its diverse merchant base. Informal traders and small shop owners who adopted iKhokha for its simplicity and care will see no disruption, according to Putman.
Why Nedbank?
iKhokha began in 2012 with a simple but disruptive goal to help informal traders and SMEs accept digital payments. In a country where cash still dominates and SMEs often struggle to access affordable financial tools, iKhokha carved out a niche with low-cost card readers and user-friendly onboarding. Over the years, the company has grown into one of South Africa’s leading digital payments and merchant services platforms for SMEs.
Putman noted that iKhokha has, for many years, partnered with Nedbank for payment processing and transactional banking. But beyond that history, the bank’s leadership and the fintech’s founders share a vision of convergence in banking and payments that creates new opportunities when combining the forces of a scaled fintech and a Big Four bank.
“Having built the business over the last thirteen years, making sure that the home we chose was going to be a good one was very important,” he said. “Through our interactions with the Nedbank team, we have built strong trust and a professional working relationship, which made this partnership a natural step.”
What the acquisition brings
For iKhokha, the acquisition opens a door to markets it could never have entered alone.
“Nedbank brings pieces of the puzzle we did not have, like deep banking knowledge, a strong balance sheet, and complementary distribution channels, while we bring digital innovation and our SME merchant network. Together, we can build one platform that better serves SMEs.”
Nedbank, which serves 7.6 million clients in South Africa, brings significant distribution heft with more than 4,100 ATMs, up to 400 branches, and over 110,000 point-of-sale devices. The bank counts 3.2 million retail clients, including 2.8 million on its Money App, where digital transactions jumped 15% in June. Beyond its home market, Nedbank is ramping up investment across the Southern African Development Community and East Africa as it seeks to lift earnings outside South Africa and cement its position in the continent’s emerging markets.
For iKhokha, that “distribution in South Africa is complementary for both businesses,” Putman notes. “But another key strategic play is the ability to use Nedbank’s work in other markets across Southern Africa, East Africa, and take iKhokha’s model to SMEs across the continent.”
Access to credit has always been a major challenge for small businesses in Africa, with only 20%-30% of these businesses with access to formal credit, according to Finmark Trust. With Nedbank’s balance sheet of total assets of R1.4 trillion (about $75 billion) as of December 2024, behind it, iKhokha could evolve from a payments partner into a full financial services platform for SMEs, helping traders not just to collect money, but to grow.
“Banking and payments are starting to merge. By combining Nedbank’s balance sheet and their banking, financial services, and payments licensing and expertise with our tech-driven distribution, we can create a platform that actually meets SMEs where they are, ” Putman said.
The acquisition is also a signal to the wider fintech ecosystem. Consolidation is accelerating, fueled by rising fintech competition, digital demand, inclusion pressures, shifting regulations, and the threat of global tech entrants. In January, Stitch, a digital payment fintech, acquired ExiPay and later acquired Efficacy Payments in July to expand its payments offering. As banks grapple with the rise of fintechs, some choose to build in-house, while others, like Nedbank, opt for acquisition.
The deal still requires the standard regulatory approvals. But in the meantime, iKhokha continues as it always has, serving SMEs, the difference now is that it does so with the backing of Nedbank—a “big brother,” as Putman calls it.
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