CAPE TOWN – A recent study suggests cash costs South Africans around R23-billion annually.
In a world where the trend is increasingly to go cashless, with countries like India already having fully cashless villages, how does South Africa fair? A Twitter poll found that 35 percent of South Africans could picture themselves transacting purely digitally, while a further 10 percent said ‘maybe’.
The poll was conducted by Capitec as part of its #GoCashlessChallenge, an initiative to draw attention to the cost of cash.
The poll also asked people to indicate those times that cash is a necessity and going cashless is just not an option. The results show people still pay cash for a number of essentials, predominantly, transport (59 percent of respondents), food (25 percent), and services (7 percent).
Francois Viviers, Executive of Marketing and Communications at Capitec Bank says the goal of the Go Cashless campaign is to highlight how digital banking can help you save both time and money.
“We realise that cash is a reality for many South Africans. When taking public transport or visiting some smaller businesses you’re forced to pay cash. Our aim with Go Cashless is to point out how people can benefit from going cash-free when it’s possible.”
“Last month more thann 5 million of our clients banked digitally on either our app, Internet banking, USSD or MasterPass. Digital banking helps our clients to bank better by saving them time, as they never have to visit a branch or ATM, and money through lower bank fees. To pave the way for digital banking in South Africa we lowered our digital fees in 2019. We believe this will have a knock-on effect and we’re likely to see digital fees lowered across the industry, benefiting South Africans as a whole.”
Are South Africans ready?
Rulof Burger, Behavioural Economics Director at Predictive Insights, weighs in: “Cash is currently the main payment method for most South Africans, especially those from lower income households, older individuals and people in rural regions. Why? Because people understand cash and trust it.
He said there’s an important education job to be done to raise people’s awareness of the cost of withdrawing cash. “Evidence shows it’s not the best way to manage your money. The accumulated costs of relying on cash are expensive. A recent Mastercard study suggests cash costs South Africa roughly R23 billion annually. There are also many indirect ‘costs of cash’ to consider – like convenience and time. Drawing cash means you have to travel to an ATM to get it and then wait in the queue to be served. You also lose out on interest by withdrawing your money instead of keep in an interest-earning account.”
It’s easier than ever before
With more than half of South Africans now owning a smartphone and digital banking available on feature phones through USSD, it’s never been easier. Viviers says “Our app is zero-rated, which means clients don’t need data to use it. Card swipes are also free and you won’t pay any transaction fees when using Masterpass. This makes it possible to use your card or Masterpass to pay for everyday small items, like snacks or a soft drink, without having to worry about the cost.”
The use of payment apps linked to QR codes has become common across South Africa. Another Twitter poll conducted by Capitec showed that, currently, people who use these apps pay via Masterpass (65 percent), SnapScan (19 percent) and Zapper (16 percent).
BUSINESS REPORT ONLINE