Despite the increasing number of mobile payment options and widespread support for card payments, South Africans are using more cash than ever.
Responding to recent questions about the addition of biometric security and contactless technology to ATMs, local banks confirmed that South Africa is still a cash country.
Subsequently, South African banks have improved ATMs with a number of features, including wider support for cash deposits, stamped statement dispensation, and many other self-service features.
Additionally, Nedbank, Standard Bank, and Absa stated they were testing new technology to secure ATM transactions and reduce the risk of card skimming.
These technologies included tap-and-PIN authentication in addition to biometric security.
Cash still growing
Absa said that South Africa is mainly a cash-based market with an increasing demand for ATMs.
“We expect the volume of ATM transactions to continue to grow as we expand our self-service banking services on ATMs as well as improving existing services,” the bank said.
This trend was confirmed by Nedbank, with the bank stating that the demand for cash and ATM features continues to grow.
“Over the past five years, cash throughput on ATMs increased by more than 100%,” the bank said.
“We have noted an increase in usage of non-cash transactions like stamped A4 statements and we will continue to expand our service offering on self-service devices.”
Standard Bank also weighed in on the adoption of ATMs and the growing use of cash.
“We also see a growth in transactions on ATM’s traditionally done in branches, such as cash deposits,” Standard Bank said.
South Africa’s cash economy
In 2017, around 90% of the total payments in South Africa were made with cash.
This was due to the popularity of using cash for lower-value payments in addition to low levels of financial inclusion.
Obstacles to the migration from cash to digital payments include the process of opening an account, the complexity of the systems, and the high level of documentary compliance.
Absa said that to cope with the increased demand, it has optimised its ATM placements in 2018 – allowing it to only marginally increase the number of ATMs.
“During 2018, we repositioned 204 ATMs more conveniently located based on customer insights,” Absa said.
“We also managed to keep our overall South African ATM footprint stable, with a marginal increase of 23 new ATMs to support our retail corporate customers.”
The bank added that cash usage will continue to grow in South Africa, and locals will continue to use ATMs or retailers to manager their cash.
“Recent statistics provided by the South African Reserve Banks indicate that cash, in the South African market, will continue to grow by 6% to 10% in the short to medium term,” Absa said.
“Customers will continue to make use of ATMs or retailers to withdraw, deposit, and manage their cash.”