South Africa has between R160 billion and R180 billion of cash in circulation, which not only enables financial crime but also leaves cashpayers vulnerable.
This is feedback from the South African Reserve Bank’s (SARB) Deputy Governor, Fundi Tshazibana, who recently spoke at the Kgalema Motlanthe Foundation Forum in KwaZulu-Natal.
She told SABC that this amount of cash presents several challenges for the country’s individuals and businesses.
“It limits the types of transactions that can be interacted with and presents a set of vulnerabilities,” she explained.
“Losing physical cash means the loss is irreversible, unlike electronic wallets or other forms of payment.”
This significant amount of cash being used in the country also brings about concerns related to criminal elements.
“Conversations have revolved around tracking cash crossing borders, a responsibility of revenue authorities,” she said.
South Africa has also seen increased crime related to cash in transit (CIT). The Cash-In-Transit Association of South Africa shed light on how this crime increased.
There had been 217 CIT robberies across the country between January and August, compared to 191 in 2022 and 188 in 2021. This equates to almost one CIT robbery a day in 2023.
Tshazibana said this emphasises the need to secure physical cash in the country, and one way to achieve that is by reducing the amount of cash used in the country.
She said the SARB is attempting to reduce the amount of cash in circulation by introducing accessible payment platforms and mechanisms for more people across the country.
This shift aims to accommodate non-banking users into the payment system and provide mechanisms for small payments, especially for informal traders.
She explained that the intention is to establish a comprehensive range of payment mechanisms for everyone in the country.
Reducing the reliance on physical cash could free up resources and enhance the ability to track the flow of money in the economy.
Currently, the significant movement of cash limits the ability to monitor and track its economic impact effectively.