Standard Bank — the largest bank by assets in SA and Africa — says cashback transactions at retail chain points of sale have surged more than 100% since 2019.
Their popularity is second only to ATM withdrawals as consumers seize on the convenience of doing shopping and withdrawing cash from a single source.
Kabelo Makeke, Standard Bank’s head of personal & private banking in SA, said fewer South Africans are relying on cash as more customers embrace digital banking alternatives.
However, Makeke says: “Emerging channels like cashback at point-of-sale (POS) and cash deposits at retailers are gaining traction as alternatives to ATMs and branches.
“Cashback at POS has surged by more than 100% since 2019, while retailer-based cash deposits, introduced in 2021, continue to grow steadily. And 11% of all cash withdrawals by Standard Bank customers are now completed at the POS,” Makeke said.
“We’re also expanding our digitally enabled service centres in accessible areas, offering cashless banking services like loan applications, transfers and account management. We’re also growing our cash deposit ATMs and retail partnerships for easier cash deposits and withdrawals.”
An SA Reserve Bank 2023 payments study report found that at 55%, ATMs remain the dominant point to access cash, followed by cashback at POS, particularly from major retailers.
The Reserve Bank study said the ability to access cash through cashback at POS has improved accessibility and made life easier for those who do not have ATMs in their area.
In support of the ATM accessibility dynamic, lower-income individuals access cash more frequently at the cashback at POS and the male/female percentages are almost reversed in the cashback at POS compared to ATM access, the assumption being that females withdraw cash when doing household shopping.
Makeke said by October 2024, monthly in-branch cash withdrawals had fallen by 64%, and branch cash deposits had dropped by 61% across personal, business and corporate segments compared to 2019.
“The most significant decline in cash deposits in the branch has been among personal customers, with an 83% drop in the past five years as more of them now largely rely on the ATMs and retailers to fulfil their cash withdrawal and cash deposits needs.
“The cash transactions left in the branch are predominantly the bulk and high-value transactions that cannot be handled by the ATMs,” said Makeke.
“Currently, in-branch cash deposits by personal customers account for just 7% of all in-branch deposits. Branches now primarily serve business and corporate customers who are performing high value and complex deposits that cannot be processed by the ATMs.
“This reduction in cash activity is consistent across provinces, with Gauteng experiencing the largest drop due to its historically higher volume of cash transactions.
“In-branch cash withdrawals and ATM cash withdrawals by personal customers have followed a similar trend, decreasing by 71% and 12% respectively, as customers increasingly adopt digital payments.”
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