Why cash still rules despite digital growth

THE digital economy is not without challenges, especially for the less educated and or marginalised groups.

- CORRIE KRUGER

DESPITE the rapid advancement of digital banking in South Africa, cash usage continues to grow at 9% per capita annually. This analysis explores why cash remains essential for marginalised communities, how banks are responding differently to digitisation, and what this means for financial inclusion in a country with deep economic divides. | FILE

According to a Reserve Bank report in 2023, “The South African economy has remained structurally the same in the last 60 years. Despite the significant progress made to digitise the payments landscape, cash usage in South Africa remains resilient and in defiance of corporate desires. Cash in circulation in South Africa has been growing at a compound annual growth rate (CAGR) of 12% over the last few decades, and 9% when calculated per capita”.

A few incidents in my personal experience made me question the move to a cashless society. A person who has worked as a gardener in South Africa for the last twenty years, just before he went back to his homeland for retirement, had his entire life savings, exceeding R80 000, withdrawn from his bank account without his knowledge. The bank in question was unable to assist him with the theft. In another case, a widow received an amount exceeding R400 000 from her late husband’s estate. The money was withdrawn from her bank account within one month. The bank in question told her that their investigations show that her personal device was used to access her account, and she, as an elderly pensioner, was left without a cent. Both these instances involved an elderly person. It is quite clear that the elderly from different race groups do not fully understand the risk associated with having access to their bank accounts via a device of their choice, such as a smartphone.