South Africans getting rid of cash

There has been a significant decline in cash use among South Africans as people increasingly turn towards digital banking. This is according to Standard Bank, which said fewer South Africans rely on cash. 

Data from the bank shows a significant decline in cash withdrawals and deposits since 2019 as more customers embrace digital banking alternatives.

Standard Bank said the COVID-19 lockdowns significantly accelerated a shift in customer behaviour, leading many to prefer ATMs, card payments, and digital banking channels.

As a result, the bank’s digital platforms have experienced significant growth, with the Banking App alone showing a 200% increase in transaction volumes.

By October 2024, monthly cash withdrawals in branches had decreased by 64%, and cash deposits in branches had fallen by 61% across personal, business, and corporate segments compared to 2019.

This decline is evident across all customer segments, although the extent of the decrease varies.

“This aligns with our strategy to enable cash transactions through self-service and other alternative cash distribution channels, like ATMs and cashback at POS, while keeping branches focused on sales, service, and relationship banking,” Standard Bank’s head of personal and private banking in South Africa, Kabelo Makeke, said. 

The most significant decline in cash deposits at the branch has occurred among personal customers. Over the past five years, this group experienced an 83% drop as they increasingly rely on ATMs and retailers for their cash withdrawal and deposit needs.

Cash transactions remaining in the branch primarily consist of bulk and high-value transactions that ATMs cannot process.

Standard Bank has invested in advanced ATMs that greatly enhance transaction speed and overall service quality to support this shift.

These new, future-ready touchscreen ATMs have a higher capacity and offer a wider range of client services, including real-time acceptance, validation, and cash recycling.

Clients can also obtain official bank documents such as account statements, proof of banking details, and confirmation of deposits, which can be printed at the ATM or sent via email.

Currently, in-branch cash deposits by personal customers account for just 7% of all of Standard Bank’s in-branch deposits. 

“Branches now primarily serve business and corporate customers who are performing high-value and complex deposits that cannot be processed by ATMs,” the bank said. 

The decline in cash transactions is consistent across all provinces, with Gauteng seeing the most significant decrease due to its historically higher volume of cash activities.

Specifically, in-branch cash withdrawals by personal customers have dropped by 71%, while ATM cash withdrawals have decreased by 12%. This trend reflects the growing preference for digital payment methods among customers.

“But we’re seeing a significant increase in ATM cash deposit amounts across all segments and into stokvels and other community savings schemes as we continue to enable our customers to migrate to self-service and digital channels,” Makeke added.

Non-cash ATM activities, such as prepaid purchases and Instant Money transfers, have seen significant reductions since 2019. 

Instant Money transfers via ATMs have halved, while prepaid purchases have declined by more than 90%, which reflects a growing shift toward banking App and USSD transactions. Many customers now prefer to purchase vouchers directly through their banking app.

Emerging channels like cashback at point-of-sale (POS) and cash deposits at retailers are also gaining traction as alternatives to ATMs and branches. 

Cashback at POS has surged by over 100% since 2019, while retailer-based cash deposits, introduced in 2021, continue to grow steadily. 

In fact, the bank said that 11% of all cash withdrawals by Standard Bank customers are now completed at the Point of sale.

As cash-handling behaviour shifts, Standard Bank stressed that it is adapting to serve a digitally inclined customer base. 

“We’ve tailored our branch services to focus on non-cash needs, complementing digital and self-service channels with advisory, account management, and cash services,” Makeke said. 

“We’re also expanding our digitally enabled service centres in accessible areas, offering cashless banking services like loan applications, transfers, and account management.” 

“We’re also growing our cash deposit ATMs and retail partnerships for easier cash deposits and withdrawals.”