The use of digital money is growing. (Image source: 123RF, created via GenAI)
Cash is still the dominant payment form among South Africans, even as the South African Reserve Bank (SARB) pushes towards a digital economy under its Vision 2030 initiative.
PayInc‘s inaugural Cash Index report shows steady uptake of PayShap, launched in March 2023, as an alternative to cash payments. Electronic fund transfers have surged, with volumes jumping 219% over the past 15 years.
SARB has seen cash in circulation moderating since 2020, and it is now at R180 billion in 2024 – about 2.5% of gross domestic product and 3.7% lower than a year ago.
“Although levels are 3.7% lower than a year ago and cash supply has eased, PayInc’s reporting metrics indicate that demand has remained steady, highlighting the resilience of notes and coins, particularly for lower value transactions,” says Shergeran Naidoo, head of stakeholder engagements at PayInc.
PayInc, home to South Africa’s national payment infrastructure, was previously BankServAfrica.
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Independent economist Elize Kruger notes that while the lower volume of cash supply reflects a “gradual move away from cash,” it also indicates efficiency improvements in cash demand management within the value chain.
Figures from SARB’s first Payment Study Report, released just over a year ago, confirm that cash remains the dominant payment form, but also show that electronic solutions are gaining traction.
The survey found that 95% of South Africans use debit cards – the second-highest payment method locally.
Credit card use came in substantially lower at 1.9%. A quarter of all South Africans used internet banking, potentially reflecting the notable shift towards this payment method during the pandemic.
“Two out of 10 consumers created their internet banking profile between 2019 and 2020, most likely coinciding with the COVID-19 pandemic,” SARB says.
The central bank also found that people pay for goods and services through digital money transfers, loyalty cards, cardless methods and crypto – although “the crypto-asset market, dominated by Bitcoin and its derivatives, has subsided in recent years”.
Digital-only banks are also gaining traction. TymeBank, the first digital bank to reach profitability in Africa, hit 10 million customers less than six years after launching in 2019.
Discovery Bank now has 1.25 million clients and became profitable for the first time in the second half of the 2025 financial year after launching in 2021.
Bank Zero, which launched in August 2021, is experiencing robust growth, particularly in business banking, though it is not yet profitable and expects to achieve break-even by approximately 2027. This bank is currently being bought by Lesaka Technologies for R1.1 billion, with the deal expected to close next year.
SARB’s modernisation efforts are encapsulated in Vision 2030, its roadmap for transforming South Africa’s National Payments System over the next four years. A key component is Project Stimela, which aims to limit cash use in the economy.
The bank believes this transformation will bring more people into the formal economy by making digital payments more accessible, affordable and easy to use. One benefit is that informal businesses will gain access to credit, insurance and other financial tools, further integrating them into the broader economy.
SARB’s Digital Payments Roadmap notes that “innovation and technological advancements are rapidly accelerating the transformation, modernisation and digitisation of world economies”.
The bank references the African Union’s Digital Transformation Strategy for Africa (2020–2030), while expressing concern that cash remains the prevalent payment method.
“[An] over-reliance on cash creates barriers or obstacles to, and lowers the appetite for, an increased adoption of new innovative digital payment methods and the frequent use of existing digital payments,” the roadmap states.
Project Stimela will expand the national payment system beyond just banks, modernise South Africa’s payment infrastructure, and enable the provision of low-cost innovative payment products and services.
Despite these modernisation efforts aimed at improving financial inclusion, PayInc notes that “cash will retain its spot as an important, trusted payment method, especially in a country with a large number of grant recipients, undocumented people and a high unemployment rate”.
While the volume and value of cash withdrawn from ATMs has declined, PayInc’s data for the second quarter – which ended at September’s close – shows people are making use of alternative withdrawal methods, such as pulling money out of their accounts at till points.
