By Ntando Thukwana.
The South African Reserve Bank (Sarb) plans to create a cash-management company by next year that will roll out unbranded ATMs and tighten oversight of how money circulates, making access cheaper and easier.
By March next year, we want to drive establishment of the cash utility,” Pradeep Maharaj, executive director of the Sarb’s Payments Ecosystem Modernisation Programme, said in an interview on Friday.
He said this will include the governance structure and the appointment of directors.
There are also plans to move cash centres operated by the Sarb and industry into the new utility, with the process to start next year, said Maharaj.
The bank will either pay compensation or offer shares in the cash utility to any entity whose assets are taken over, he added.
SA has about 109 centres that store, process and distribute cash, but Maharaj said it probably only needs 40 to 50.
He also said the bank “wants to finalise the white-label ATM deployment next year for rollout starting in in 2028”.
Converting branded ATMs
The central bank is in talks with lenders about converting some of their ATMs into shared, neutral-branded machines that customers of different banks can use, Maharaj said.
The parties plan to meet next month to finalise the proposals.
The ATMs will be required to offer bank-inquiry capabilities, withdrawals and deposits, with some services available free of charge, he said.
Africa’s largest economy has about 30 000 ATMs, with many out of reach for low-income and rural communities that have limited digital-payment options and often face costs as much as five times higher than wealthier urban users.
The costs of cash
Cash remains a significant component of South Africa’s payment ecosystem.
The country has about R180 billion of physical money circulating in the economy, and cash accounts for about 56% of all consumer transactions by volume even as digital payments grow.
Managing, transporting and securing physical money cost almost R90 billion a year, a burden shouldered by consumers.
The central bank plans to change that with its reforms, which will likely be the largest revamp in how cash is circulated since ATMs were introduced more than 40 years ago.
It also plans to explore how ATMs can be optimally placed and what models should be adopted, Maharaj said.
Plan to boost digital payments
The Sarb aims to increase digital payment use to 15 per capita per month from one per capita to bring the country in line with other emerging markets, he said.
Brazil, India and Thailand do about 25 to 26 transactions per capita a month of fast payments.
It plans to do this by increasing the adoption of PayShap, the digital payments platform it owns with commercial lenders.
PayShap allows real-time transfers by creating a uniform experience and allowing non-banks access, among other measures.
The Sarb aims to increase the number of transactions processed via the system from 60 million to 500 million per month by 2029.
“We want to measure that, and see how we progress in the digitisation work that we are doing,” Maharaj said. It’s no use building very fancy infrastructure and nobody uses it.”