Some SA banks scale back ATMs as cashless digital economy grows

CapeTalk's Clarence Ford speaks to Annelene Dippenaar, Chief Business Officer at Shop2Shop.

Listen below: 

South Africa’s vibrant township economy, now valued at an estimated R750 billion, is undergoing a significant transformation.

Small and medium-sized enterprises (SMEs) are thriving, driven in part by the growing adoption of cashless transactions.

While this rise in digital payments raises questions about the future of physical cash, experts caution against assuming an entirely cashless future.

Dippenaar notes that “there are clear benefits to reducing reliance on cash and encouraging digital payments,” but also believes a completely cash-free system may be difficult to achieve.

Some banks in South Africa are beginning to scale back their ATM networks and partnering with retailers to offer cash withdrawals in-store - which is an "innovative" move, believes Dippenaar.

This isn’t necessarily a sign that South Africans are using less cash.

It’s more about banks being smart, leveraging existing retail infrastructure to cut the high costs of managing physical cash, adds Dippenaar.

"When you look at the end consumer, there's more optionality... you can purchase goods online without being physically present, improved security against physical theft and reducing the risk of carrying the cash on you - especially in a society like South Africa where there is a real concern around security."

- Annelene Dippenaar, Chief Business Officer - Shop2Shop

"From a regulatory perspective, there's more transparency and reduction in crime... and specifically around the government's ability to monitor for financial transactions, money laundering and terrorist financing - so from that perspective, there's a benefit to reducing cash transactions in a country like South Africa."

- Annelene Dippenaar, Chief Business Officer - Shop2Shop

"To talk about a society that's truly and only cashless is a difficult statement and the reduction of use of cash and this notion of South Africa needing to go cashless... the question is: will this really happen? While there are banks who are closing and reducing their ATM footprints, what they are doing is being innovative by using retailers across South Africa to act as ATMs. So, it's not necessarily indicative of reduced cash usage in South Africa, but banks being smart by using other people's infrastructure to reduce their cost of handling cash."

- Annelene Dippenaar, Chief Business Officer - Shop2Shop

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