By 
South Africa is preparing for a major transformation of its cash ecosystem, as the South African Reserve Bank (SARB) moves to modernise how physical money is managed, distributed, and accessed across the economy.
Under plans being developed by the central bank, reforms will include the creation of a dedicated cash-management utility, the rollout of white-label ATMs, and tighter oversight of cash circulation. The objective is to reduce the high cost of cash, improve accessibility—particularly in rural and low-income communities—and ensure a more efficient, interoperable system.
Despite rapid growth in digital payments, cash remains dominant in Africa’s largest economy, accounting for nearly two-thirds of all transactions. Around R180 billion in cash is currently in circulation, equivalent to about 2.5 per cent of GDP. Managing, transporting, and securing this cash costs an estimated R90 billion annually, with consumers ultimately bearing much of the burden. Crime alone accounts for roughly 13 per cent of these costs.
The reform agenda, known as the Cash Smart Strategy, aims to make physical cash cheaper, safer, and more equitably distributed. SARB has emphasised that the goal is not to eliminate cash in the near term, but to “smartly” modernise its use, particularly for communities with limited access to digital payment alternatives and disproportionately high transaction fees.
According to the central bank, as South Africa’s digitisation levels approach those of countries such as India, Brazil, and members of the European Union, cash usage could decline by 30 to 40 per cent over time.
“It’s a very radical transformation of the industry,” said Pradeep Maharaj, who leads SARB’s Payments Ecosystem Modernisation Programme, noting that the proposed reforms represent the most significant change to the cash system since the introduction of ATMs more than four decades ago.
Central to the strategy is the establishment of a jointly owned cash utility company involving banks, retailers, and other market participants. The model is similar to the Netherlands’ Geldmaat system, where major banks operate a shared ATM network. The utility would be responsible for forecasting cash demand, managing distribution, and improving efficiency, while eliminating an estimated R480 million in indirect subsidies currently paid to private operators handling cash on behalf of the central bank.
Existing bank-owned ATMs would be transferred into the utility and converted into white-label machines, allowing customers of any bank to use them—potentially at little or no cost. SARB expects full interoperability to significantly reduce transaction fees and improve fairness across the system.
While the move may reduce certain fee-based revenues for commercial banks, SARB believes cost savings from streamlined cash management will offset the impact. “We hope this will reduce banks’ overall costs by even more than the revenue they may lose,” Maharaj said.
The reforms will be supported by broader regulatory changes, with the central bank considering extending oversight beyond banks to include cash-in-transit firms, retailers, and some payment service providers. A draft regulatory framework is expected early next year.
SARB is also engaging major retailers such as Shoprite and Pick n Pay, which collectively recycle up to R100 billion in cash annually. These retailers could become shareholders in the utility and operate as licensed cash wholesalers with direct access, potentially improving their own operational efficiency.
While implementation could take up to three years, analysts view the strategy as a necessary reset. As Jannie Rossouw, honorary professor at the University of the Witwatersrand Business School, noted, the reforms would be worthwhile if they succeed in making cash cheaper, safer, and more accessible—while gradually reducing the economy’s heavy reliance on physical money.
Comments