South Africans Still Prefer Cash in Hand: In a world rapidly shifting to mobile payments and digital banking, South Africa remains stubbornly loyal to cash. Whether it’s buying groceries at a spaza shop or paying a local handyman, physical money still changes hands more often than debit cards or e-wallets. While digital tools have grown, cash remains dominant due to a mix of practical, cultural, and financial reasons—many of which might surprise you.
According to the FinScope South Africa 2023 Survey, a staggering 94% of South Africans withdraw cash monthly, and 86% use it regularly for transactions. This behavior persists despite high mobile phone usage and the availability of banking apps. So, what’s really going on?
South Africans Still Prefer Cash in Hand
| Aspect | Key Insights |
|---|---|
| Cash Usage | 94% withdraw cash monthly; 86% use it regularly |
| Bank Access | Over 84% have bank accounts, yet prefer cash |
| Informal Sector | Employs over 8.5 million people, transacts mostly in cash |
| Youth Trends | 35% of urban youth use mobile wallets; still prefer cash for everyday purchases |
| Africa Comparison | Kenya’s M-Pesa has 70%+ adoption; South Africa lags with ~30% mobile money use |
| Trust Issues | 40% cite fear of fraud and banking errors as reasons to avoid digital tools |
| Regulatory Role | SARB promotes financial inclusion, but digital uptake remains slow |
| Official Website | https://finmark.org.za |
South Africa’s deep-rooted preference for cash reveals more than outdated habits—it tells a story of unequal infrastructure, socioeconomic complexity, and deep trust issues with financial systems. While digital payments will continue to grow, they must meet people where they are—not where technology assumes they should be.
To bridge the gap, fintech innovators, banks, and the government must work together to build a future where cash and digital coexist. Until then, the crinkle of a R100 note will continue to be more than just money—it’s a lifeline for millions.
Why Cash Still Dominates in South Africa
1. Infrastructure Gaps Are Still a Barrier
While banking infrastructure in cities is modern, many rural areas lack reliable mobile networks, electricity, or POS devices. Informal traders and local shops often do not accept digital payments due to poor connectivity or lack of trust in such systems.
“The card machine stops working whenever there’s load-shedding. I can’t take that risk,” says Thabo, a vendor in Limpopo.
2. Budgeting and Fee Avoidance
For many low-income earners, handling cash is a way to control spending and avoid bank fees. A R10 ATM fee or a R5 balance enquiry charge adds up quickly. Keeping physical cash helps people allocate money into envelopes for food, transport, and savings.
In fact, some community-based finance practices like “stokvels” still operate solely with cash, reinforcing the cycle.
3. Trust and Security Concerns
Distrust in banks is common, especially after cases of unauthorized debits and hidden fees. Additionally, South Africa’s rising cybercrime rates have made people wary of digital banking.
A 2023 Interpol report ranked South Africa among the top African countries targeted for online banking fraud. It’s no surprise many feel their money is safer in their pockets than in an app.
4. Cultural Traditions and Social Bonds
Cash facilitates face-to-face transactions and personal accountability. In townships and villages, paying someone in person shows respect and builds trust—values that digital transactions haven’t yet replicated.
Whether it’s funeral contributions or grocery club savings, informal networks still run on cash, and that’s not changing overnight.
How South Africa Compares with Other African Nations
South Africa may be more industrialized than its neighbors, but when it comes to mobile payment adoption, countries like Kenya and Ghana lead the pack.
- Kenya’s M-Pesa boasts over 70% mobile money adoption, making cashless payments a norm.
- In contrast, South Africa’s mobile money usage hovers around 30%, hindered by regulation, bank fees, and fragmented service offerings.
This shows that economic development doesn’t automatically translate into digital payment dominance.
Urban vs Rural, Youth vs Older Generations
Urban youth, especially those with access to smartphones, are slowly embracing e-wallets like FNB’s eBucks or Capitec Pay. Yet studies reveal that even digitally literate youth prefer cash for smaller purchases, citing reasons like control, convenience, and merchant acceptance.
Meanwhile, in rural areas, digital adoption remains negligible due to poor connectivity and low digital literacy.
Role of the Government and Regulatory Bodies
The South African Reserve Bank (SARB) has outlined its goals for financial inclusion, including promoting low-cost banking services and interoperability among mobile payment platforms.
However, experts argue that more needs to be done, especially in:
- Enforcing zero-fee accounts for the poor
- Subsidizing digital infrastructure
- Offering protection against digital fraud
Spotlight on Fintech: Who’s Trying to Fix This?
A few South African startups are working to bridge the cash-digital divide:
- Yoco: Helps informal traders accept card payments via low-cost devices
- Ozow: Simplifies EFT payments using mobile numbers
- TymeBank: Offers zero-fee banking via kiosks in retail outlets
- Peach Payments: Focuses on mobile payments for small businesses
But these innovations must overcome behavioral inertia and trust gaps to truly scale.
Real-Life Case Study
Zanele’s Story
Zanele, a 32-year-old domestic worker in Soweto, uses a basic cellphone and gets paid in cash. She saves R1,000 monthly in a stokvel group and uses physical cash to pay for groceries and school fee.
This story reflects how simplicity and transparency in cash transactions build confidence where digital methods fail.
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FAQs
Q1. Why don’t people trust digital banking?
Due to hidden fees, fraud cases, and bank errors, many South Africans fear losing money digitally. Trust takes time to build, especially among low-income communities.
Q2. Are there government programs to promote digital inclusion?
Yes, SARB and FSCA are working on expanding low-fee accounts, improving financial literacy, and subsidizing fintech initiatives, but progress is slow.
Q3. How do other African countries manage without cash?
Countries like Kenya and Ghana have strong mobile money systems backed by telecoms, which helped them leapfrog banking infrastructure. South Africa still relies on formal banking, which is less flexible for informal traders.
Q4. Will South Africa go cashless anytime soon?
Not likely. Hybrid models that allow people to switch between cash and digital payments at their own pace are more realistic. Full cashless adoption will require major infrastructure, education, and trust-building efforts.
