It’s true that cashless transactions might be growing in popularity around the globe, but millions of South Africans still prefer using physical coins and notes.

Businesses that ignore this substantial segment of the population – and potential customer base – risk missing out on valuable opportunities for growth and profit.

Discover the five main reasons why cash payment processes aren’t going anywhere soon – and why they’ll remain popular for the foreseeable future.

Statistics on & Drivers Behind Cash’s Continued Popularity

A 2022 study by Strategy&, the strategy consulting unit of PricewaterhouseCoopers, looked at three major economies representing the African continent – South Africa, Kenya, and Nigeria. They set out to determine consumer preferences regarding open banking and payment processes, and found:

• 50% of the 1 357 respondents made payments using physical money because there were no alternatives readily available.
• 39% of the respondents were unwilling to share their data, even if it would benefit them and their payment/banking experience.
• Cash remained the undisputed king, making up ⅓ of all payments across the three economies.
• When choosing a bank, Africans first look for a good mobile banking app and next for low-cost cash withdrawals.
• South Africa’s greatest cash users are 18-24 years old. This aligns with a 2023 study by The Harris Poll (on behalf of CreditKarma), which revealed that 69% of Gen Zers from the UK and the US used cash more often than they did the previous year. In fact, almost ¼ (23%) of them used cash for most of their purchases.

Although the Strategy& study found that 25% of Africans placed higher trust in banks than any other company for their data protection and banking services, the Harris Poll study found quite the opposite. Young people, in particular, are keeping lots of cash at home, rather than in their bank accounts, in a trend called ‘cash stuffing.’

Popular on social media, this trend involves dividing large amounts of physical money into separate envelopes, creating so-called ‘money buckets’ for set expenses. The reason behind this objectively risky behaviour? A desire to avoid debt and exercise greater budget control.

Bearing these studies in mind, as well as countless others, it’s clear that cash usage isn’t dying out anytime soon. And there are plenty of reasons why, including:

1. High Data Costs & Poor Infrastructure

Smartphone adoption might be at an all-time high, but that doesn’t mean that everyone has access to enough data to justify joining the cashless revolution. South Africans pay more for 1 GB of data than most other countries on the continent, and access to free Wi-Fi is also limited.

Forbes Africa Insights quotes Ashley Naidoo, Kazang Pay’s South African Director, as saying, “Where we are struggling is that affordability point of view [that’s] still a touchy point. Because when you are sitting in a country with 35% unemployment, not everyone can afford a [gigabyte] of data to do financial transactions.”

Add poor infrastructure maintenance to these hurdles, and you can quickly understand why cash use remains so prevalent. Think about it this way: when the power grid fails, cell phone tower batteries don’t last forever, in turn leading to data connectivity issues and an inability to access online banking services.

Did you know? Several Deposita devices, including the Protector 1 200 sp Pro, feature backup batteries to ensure transaction completion whenever unexpected power failures strike.

2. It Avoids the Hidden Costs of Digital Cash Acceptance

“Cash has a number of benefits: it’s immediate, it’s considered free – there are no credit card processing fees attached to it – and it’s anonymous.” – Ricardo Platt, Vodacom’s Managing Executive of Payments

Yes, in many ways, credit and debit card use is convenient, but it’s also important to remember many consumers and businesses prefer cash due to hidden or additional costs.

Forbes Africa Insights’ research revealed that 29% of respondents opted for cash payment processes to avoid the hidden banking costs associated with card transactions. Businesses incur extra costs with cashless transactions too, paying up to R3,50 for every R100 received. Taking into account other expenses like processing fees, card terminal rentals, and more, it’s no wonder automated cash handling system fees are often preferred to their cashless counterparts.

3. Cash Isn’t More or Less Risky Than Cashless Payments… Especially with the Right Payment Processes in Place

Cashless payment advocates like to argue that card payment processes are safer than carrying around physical money. However, the reality is both methods come with risks. Where carrying around cash can leave you vulnerable to muggings and misplacement, digital transactions (think tap-to-pay) open you up to card cloning, scamming, and fraud. 

Also, with the proper cash and payment management solutions in place, coin-and-note transactions couldn’t be any safer. Take our tailored Protector and Exchangor devices: once funds enter either, they’re protected by various security features, including tamper notification and 24/7 on-site monitoring, until a set or dynamically scheduled cash-in-transit (CIT) collections date, when the money is transferred to the bank.

4. Nowadays, Cash Handling Is Quick, Easy & Reliable

As discussed earlier, many (young) people in South Africa and abroad have re-embraced cash, because it helps them spend more mindfully and remain within budget.

This, coupled with the fact that ATMs are readily available around the country, means most South Africans don’t find accessing their money a hassle. Plus, when businesses have cash management solutions like Deposita’s at their disposal, they can quickly and easily process their customers’ funds, making for a streamlined and reliable process all around.

5. No Third-Party Involvement Necessary

In this day and age, where data brokers and shady marketers will do anything to get their hands on your personal details, it’s no wonder that cash payment processes remain in high demand. 

Completely anonymous, customers can go about their day paying for goods and services without having to worry that their information is being collected or movements tracked based on their digital payment footprint. Businesses happy to accept cash also endear themselves to such clientele, building a trusting relationship and subsequently attracting return customers.

Our Connector Software as a Service, which forms part of our cash and payment management offering maintains a thorough transaction history. This makes financial reporting a breeze and ensures that you can simply review the transaction log if you suspect any discrepancies.

Streamline & Secure Cash Payment Processes with Deposita

So, if your business attracts plenty of pro-cash customers, or you want to appeal to this significant group, get in touch today. Our sales team would be happy to discuss your situation and help you identify the best cash management solution for your needs.