The end of cash as you know it in South Africa
The old way of receiving and accessing cash is changing rapidly in South Africa. More people are using instant payments instead of cash, especially in small towns and rural areas.
At the same time, banks are also closing hundreds of branches and ATMs as they move towards digital banking.
Ettienne Mostert, Business Development and Partnerships Manager at the University of Cape Town’s Hasso Plattner d-school Afrika, previously warned that the country’s unbanked population faces a growing digital divide.
“South Africa’s major banks are closing physical branches and ATMs at an unprecedented rate. Standard Bank, for example, has reduced its branch footprint by 42% since 2017,” he said.
Absa, FNB, and Nedbank have also scaled back their physical networks as they push customers towards online and app-based banking.
While some banks have added a few new branches over the past year, these are smaller, more automated, and offer fewer services.
For most South Africans, digital banking has made life easier. They can send, receive, and spend money instantly using their phones.
However, Mostert said that for these 3.9 million unbanked South Africans, the digital transformation raises the question of how they will access financial services in a world increasingly dominated by apps and online platforms.
Standard Bank has tried to fill this gap with its growing Instant Money service, which allows people to send cash digitally and withdraw it without a bank account.
The bank noted that the platform has become one of the fastest-growing ways to transfer money in South Africa.
It added that customers are now completing 169% more Instant Money transactions each month than they did five years ago.
Over 200,000 new Standard Bank digital customers have used Instant Money this year alone. Many South Africans use it to send small amounts of money to family and friends.
Recipients can then withdraw their funds at various access points in their communities, including spaza shops and convenience stores.
Massive growth in Instant Money transactions
In the past two years, cashout activity at these community access points has more than doubled, Standard Bank said.
In response, the group has expanded its Instant Money Cashout network to include more than 400,000 withdrawal points nationwide.
This expansion was done in partnership with Flash and Shop2Shop through OTT, giving rural and peri-urban residents more places to collect their money.
“This is a major step forward in expanding financial access for our customers,” said Kabelo Makeke, Head of Personal and Private Banking at Standard Bank. “Many people in small towns and rural areas face long trips to reach an ATM or branch.”
The new cashout points are found in spaza shops and small retailers in areas like Hammanskraal, Umlazi, Giyani, Tzaneen, Thohoyandou, and rural parts of the Eastern Cape.
When one provider was unavailable, the bank partnered with the service most commonly used locally, such as OTT, Flash, or Shop2Shop.
By adding cashout points to local shops, it has become easier for people in remote areas to get their money while also helping small businesses earn from transactions.
“This innovation doesn’t just make life easier for customers. It also supports the township and rural economy,” Makeke said.
The bank’s move was also driven by a change in how people use Instant Money. More South Africans are sending smaller amounts of money more often—a trend that makes travel costs to withdraw funds more burdensome.
“This pushes up the unseen costs of cash transfer services. Improving accessibility was at the heart of this initiative because we can’t improve financial inclusion without making access easier,” said Makeke.
Instant Money users can also withdraw cash at 17 major retailers, including Shoprite, Checkers, PEP, Pick n Pay, Boxer, Spar, and OK Furniture, as well as at Standard Bank ATMs.
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