South African digital bank Bank Zero has reached break-even five years after opening to the public, marking a major milestone for the app-only lender as it shifts its focus towards scaling through partnerships.
The bank recorded its first break-even month in August, with revenue covering its operating costs for the month. However, Bank Zero does not expect its earnings to become consistently profitable immediately, with results likely to fluctuate in the near term.
The lender’s next phase of growth will centre on its alliance-banking model, which allows fintechs, retailers and digital platforms to use Bank Zero’s banking infrastructure while bringing their own customers onto the platform.
Bank Zero currently has about 275,000 direct customers. Its alliance partnerships are adding another 500,000 customers to the platform, although there is some overlap between the two groups.
That strategy represents a significant shift from the bank’s original plan. When Bank Zero launched in 2021, it estimated that about 100,000 customers would be enough to reach break-even. It has now reached that milestone with a larger customer base while building a model designed to support significantly more users.
Founded in 2018, Bank Zero opened to the public in August 2021 after building its banking platform and core infrastructure from scratch rather than adapting an existing banking system.
According to CEO Yatin Narsai, the bank invested just under R300 million ($18.5 million) to build and operate its technology and banking infrastructure up to the point of break-even.
Narsai estimates that acquiring and customising a comparable banking platform would have cost at least R3 billion ($184.6 million), before ongoing maintenance and modification costs.
Building its own technology has also given Bank Zero greater control over the features it offers. The bank says its platform has security and compliance controls built into the system, while a patented technology is designed to prevent card fraud and phishing.
The bank has also attracted more business customers than initially expected. Businesses now account for 18% of its customer base, up from the 10% projected in its original business case. More than 80% of those business customers are registered companies.
Bank Zero says its business offering includes features such as digital mandates, multi-level authorisation, bulk payments and alerts when account details are changed.
The bank also sees business customers as an important part of its revenue model because they typically maintain higher account balances than individual customers.
But alliance banking could become the bigger growth engine.
Under the model, Bank Zero provides the underlying banking infrastructure to other companies, allowing them to offer financial products such as cards to their customers without having to build a bank from scratch.
The bank spent more than 18 months developing the alliance-banking proposition before launching it in January 2026. Since then, it says interest from potential partners has been strong.
One of the largest examples is Mukuru, an African remittance fintech that serves migrant communities. According to Narsai, around 500,000 Mukuru customers are being onboarded onto Bank Zero’s platform.
That would take the number of end account holders connected to the platform to more than 700,000, although the figure includes customers brought in through partnerships rather than Bank Zero’s direct customer acquisition.
The bank’s path to break-even has also come without relying heavily on lending. Bank Zero chairman Michael Jordaan has previously highlighted this as an advantage, allowing the lender to reach profitability without taking on the credit risks associated with building a large loan book.
Lending could now become another source of growth as the bank expands.
For Narsai, the immediate priority is to secure larger partnerships and bring more transaction activity onto the platform.
“We’re going to focus on the big fish, and we are talking about big books,” he said.
Bank Zero expects earnings to remain uneven in the short term but is forecasting stronger revenue growth and healthy profit in 2027.
The bank is also waiting for approval from the South African Reserve Bank to introduce new foreign-exchange capabilities, which could open another revenue stream as it expands beyond its existing banking services.