Who’s Still Relying on Cash?

Fewer South Africans are relying on cash, with Standard Bank data showing a significant decline in both cash withdrawals and deposits since 2019, as more customers embrace digital banking alternatives.

This shift was largely accelerated by the COVID-19 lockdowns, which pushed many customers toward ATMs, card payments, and digital banking channels. As a result, Standard Bank’s digital platforms have seen substantial growth, with the Banking App alone experiencing a 200% increase in transaction volumes.

Thanks to this shift, by October 2024, monthly in-branch cash withdrawals had fallen by 64%, and branch cash deposits had dropped by 61% across personal, business, and corporate segments compared to 2019. The decline is evident across all customer segments, though its scale 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,” said Kabelo Makeke, Standard Bank’s Head of Personal & Private Banking in South Africa.

Personal banking customers’ cash habits

The most significant decline in cash deposits in the branch has been among personal customers, with an 83% drop in the past five years as more of them now largely rely on the ATMs and retailers to fulfil their cash withdrawal and cash deposits needs. The cash transactions left in the branch are predominantly the bulk and high value transactions that cannot be handled by the ATMs.

To support this transition, Standard Bank has invested in state-of-the-art ATMs that have significantly improved transaction speed and overall quality of service. The new future-ready touchscreen ATMs have higher capacity and offer more client services, including real-time acceptance, validation, and recycling of cash. Clients can also obtain official bank documents such as account statement, proof of banking details and confirmation of deposit which can either be printed at the ATM or sent on e-mail.

Currently, in-branch cash deposits by personal customers account for just 7% of all in-branch deposits. Branches now primarily serve business and corporate customers who are performing high value and complex deposits that cannot be processed by the ATMs. This reduction in cash activity is consistent across provinces, with Gauteng experiencing the largest drop due to its historically higher volume of cash transactions. In-branch cash withdrawals and ATM cash withdrawals by personal customers have followed a similar trend, decreasing by 71% and 12% respectively, as customers increasingly adopt digital payments.

“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.” adds Makeke.

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%, reflecting 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 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. 11% of all cash withdraws by Standard Bank customers now completed at the Point of sale.

As cash-handling behaviour shifts, Standard Bank 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.

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,” Makeke concludes.