Migrating to a digital economy in South Africa

Daniel Puchert

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South African plan to say goodbye to cash

Despite the surging adoption of contactless payments in South Africa, more than half of the country still relies on cash as their dominant payment method, and the digital divide is slowing the migration to digital currencies.

South Africa's major banks have noted that transactions made with digital wallets have been skyrocketing, with Capitec reporting a 238% increase in digital payment volumes between June 2023 and June 2024.
 

Migrating to a digital economy in South Africa​


This article was sponsored by SARS.
 
You can not kiss cash goodbye. I learnt this as a child, when I saw an auntie pull cash out of her hoo haa at the till.

I saw this on a hot hot summers day this year. An overweight sweaty aunty pulled out a wad of soaking wet R100 bills from her bra to pay the cashier... the cashier took a look and donned a pair of latex gloves.
 
Not mentioned by the OP:

South Africa’s major banks have noted that transactions made with digital wallets have been skyrocketing, with Capitec reporting a 238% increase in digital payment volumes between June 2023 and June 2024.

However, this is primarily attributed to upper-income segments, with high transaction fees and a lack of Internet access hindering greater adoption.

Roodt argued that this lack of trust stems from the country’s lowered confidence in governmental institutions and, thus, South Africa’s economic future.

He said that even PayShap, a universal payment system meant to lower the barriers for South Africans sending money to one another, has been surrounded by rumours of government surveillance and spending controls.

The South African Reserve Bank’s (SARB) Digital Payments Roadmap also points out that cash is preferred for specific transactions, even by those who have bank accounts.

A study by the University of Pretoria and SVB Services found that 55% of South African earners use cash as a dominant payment method.

This study divided the South African public into five categories: cash-reliant, cash status, cash-functional, digital adopter, and digital migratory.

The categories fall on a spectrum based on their preference for the future use of cash and digital payment methods — with cash reliant on one side and digital migrator on the other.

The first three categories, cash reliant, cash status, and cash functional — 46.6% of the population — although using both payment forms, tend towards a pro-cash future.

This is primarily due to circumstantial factors such as those mentioned by the SARB, such as low merchant adoption of digital payments, being paid in cash, or lack of smartphone or Internet access.

Additionally, digital payment options do not cater to the needs of all income segments.
 
Time to heavily invest in precious metal bullion, stocks of course have ZERO value in the real world. But Gold or silver bars will always be a tradable commodity.
 
Time to heavily invest in precious metal bullion, stocks of course have ZERO value in the real world. But Gold or silver bars will always be a tradable commodity.

Now you talking my language.
 
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