The Outlook for Cash in South Africa for 2020


Among the metal shacks and narrow side streets of South Africa’s townships, one of the country’s biggest lenders sees a sizeable market it wants to be first to crack; multi-million-rand businesses operating largely in cash.

young south african businessman holding new bank notes

FirstRand, South Africa’s biggest lender by market share, sees enterprises such as Ram Thapa’s, a beauty shop and fast-food outlet with a combined annual turnover of R19 million,  but with no business account, as a ripe target for a host of financial products.

This type of example is just the tip of the iceberg in terms of the amount of cash that is being exchanged on a daily basis in South Africa – at best estimates, South Africa’s informal business sector serves a burgeoning consumer market worth more than R100 billion in the country’s rural areas, townships and cities.

Many of South Africa’s top Economists have predicted that the demand for cash in the country is expected to grow in the coming years. They noted that the size of the parallel, or informal economy, is a significant determinant on the demand for cash.

According to the PYMNTS Global Cash Index in 2015, South Africans used a total of $183.7 billion in cash. This is up from $156.9 billion in 2010.

One of the major factors that has contributed to this growth is that cash is traditionally used for lower-value payments (R250 and less), but the volume is driven by the fact that around 90% of payments in SA are made in cash.

It is safe to assume that:

  • Cash remains the most widely used payment instrument in the world and on all continents.
  • Africa appears most reliant on cash
  • Demand for cash is increasing globally, based on the rising value of ATM withdrawals and currency in circulation, both in absolute value and relative to GDP.
  • The value of ATM withdrawals, the most direct measure of the use of cash in day-to-day transactions, is rising in all African countries, especially in South Africa, while access to cash through bank branches and ATMs is rising with sufficient room for further growth towards global averages.

The outlook for 2020 in terms of cash demand is extremely encouraging. We can all agree that if there is cash available, it will be withdrawn from an ATM somewhere in South Africa. Hopefully it will be withdrawn from your premises.