South Africans are saying goodbye to banks for cash
South Africa is experiencing a surge in digital payments amid a broader bank-led push to systems like instant EFT.
However, the latest data shows that cash still dominates in many South Africans’ lives, and households are turning towards alternative means of getting it.
Specifically, along with the growth in digital payments and the shutting down of ATMs by the country’s big banks, South Africans are now heading to retailers and till points for cash.
According to the inaugural PayInc Cash Index, over the past year, cash supply and cash demand have eased in South Africa.
However, the numbers are relatively steady, pointing to the resilience of notes and coins, particularly for low-value transactions.
The index tracks the shifting environment for physical money in South Africa, drawing on data from PayInc’s Independent Cash Management Service (ICMS).
The group measures three key areas: Cash Inventories, Supply to Access points and implied Demand.
In terms of inventories, data from the South African Reserve Bank (SARB) shows that notes and coins in circulation have levelled off since 2020. At R180 billion in 2024, in nominal terms, it equates to about 2.5% of GDP.
However, PayInc said there has been a notable moderation in real terms. This has been seen through the commercial banks in the country, reducing their cash holdings over the same period.
This comes with the caveat that this may be due to efficiency improvements, rather than a decline in demand, the group noted.
To this point, cash is accessible not only through banks and their ATMs, but also a growing network of non-bank providers such as independent ATM deployers, cash aggregators, retailers and merchants.
PayInc said that this reflects a structural reform, not necessarily a decline in the importance of cash for banks or consumers.
The supply indicator of the index—which is incomplete as it does not track all non-bank activity—confirms a structural shift with fewer bank-branded ATMs, more independent networks, and wider cashback and deposit options, it said.
South Africans going elsewhere
What happens to cash after it’s withdrawn remains uncertain. With more non-bank players now part of the ecosystem, the flow and velocity of cash are harder to track, and available data is incomplete.
To better understand this, the PayInc Cash Index compares the total value of notes and coins in circulation with the cash held by the SARB and commercial banks.
The difference, called ‘other cash’, represents money held by individuals and non-bank providers.
While this data doesn’t yet distinguish between the two groups, it offers a credible view of cash demand in the wider economy and will serve as a key demand indicator in the new PayInc Cash Index, the group said.
The accessibility to cash is gradually being reshaped by the growing number of non-bank players providing cash services in an ecosystem formerly dominated by banks.
According to independent economist Elize Kruger, while major banks have been cutting ATMs, this does not necessarily point to a drop in demand.
“Instead, it reflects the broadening role of non-bank providers, such as retail stores, in offering cash access, driven by shifts in the broader cash supply chain,” she said.
In lieu of withdrawal points from banks, those looking for money will instead opt for these wider alternatives.
Banks have also caught on to this, with finance giants like Standard Bank adopting voucher-based instant payments, redeemable at 400,000 withdrawal points nationwide.
However, even with the cash landscape changing instead of dimming, the growing adoption of digital payments also cannot be denied.
PayInc noted that PayShap and EFT transactions have gained significantly over the years, rising from 406.9 million in 2010 to 1.13 billion in 2024.
This reflects a clear and growing shift from cash to digital payments.
“The data shows that while cash retains a strong foothold in the economy, the ecosystem around it is modernising, improving efficiency and access,” the group said.
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