21 June 2023
Product5 Minutes, 13 Seconds read

Reach more South Africans with cash payments: Stitch Cash vs vouchers

In South Africa, 9 out of 10 transactions in the country today are still carried out in cash, presenting an opportunity for businesses to expand their reach by offering cash payments for digital products and services.

Lucille Wilcox, Content Marketing Manager

Despite the rapid scaling of digital financial products and solutions, the enduring reliance on and importance of cash in emerging markets means those businesses that cannot accept cash payment are missing out on a significant proportion of their addressable market, and restricting access to digital products and services.

In South Africa, around 85% of the population has a bank account, but BankservAfrica estimates that 9 out of 10 transactions in the country today are carried out in cash.

In our Consumer Payments Preferences report, we found that the reasons for cash preference range from convenience and safety to lack of access to digital methods, to concern over high fees associated with some digital payments. 

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For the majority of consumers in South Africa, cash remains the easiest and most convenient way to transact. Results from a PWC report on payments and open banking show that poor network coverage, high data costs, anonymity, and financial education all play a role in the continued reliance on cash.

Those who prefer cash payments are often excluded from services that only offer digital payment methods. Equally, businesses are missing out on the opportunity to increase their reach and serve these customers.

While alternative methods, like vouchers, exist to make it easier to extend reach and enable access to certain things like subsidies, discount programmes or gifts, for day-to-day or high-volume transactions, the ability to pay in cash is still unbeatable.

Drawbacks associated with voucher solutions

In our survey, of those who have used vouchers to access digital services such as online gaming, 57% of respondents indicated they’d had a negative experience. Reasons ranged from the loss of the physical voucher, to technical issues, to barriers such as the need to travel long distances to acquire a voucher. 

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Alleviating these issues requires cooperation among and communication between all parties involved: the customer, the voucher service provider and the business or platform the customer is trying to use. Cumbersome feedback loops can drain business resources and have the potential to deter customers from coming back due to a tedious and negative experience - not to mention the high costs of accepting vouchers for businesses.

As well, integrating a voucher solution as a separate offering from other common payment methods such as card or bank transfer requires additional technical and engineering resources from the business. 

The power of cash payments to increase reach and retention

An overwhelming 96% of survey respondents indicated they would prefer to top up their digital accounts using cash if it were an option, illustrating the demand for access to cash payment options. 

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Most of the commonly referenced issues associated with vouchers can be mitigated by going straight to cash. For the majority of respondents in our survey who reported “losing a voucher”, “having to travel far to get the voucher” or that “the voucher didn’t work”,  the ability to bypass physical vouchers and simply pay at an ATM means these risks and challenges are no longer an issue.

This can also alleviate manual and programmatic errors like “typing in the wrong voucher code”, being “charged incorrectly” or “receiving the wrong amount”.  

For international businesses looking to expand to South Africa, offering customers the ability to pay in cash presents a significant opportunity for greater reach. This is true across verticals – from e-commerce businesses, to wallet-based financial service applications, to insurance and transport businesses – a smooth customer experience and seamless reconciliation process means less time spent resolving voucher-related issues, and a higher degree of retention.

Stitch Cash is best positioned to help customers make high-volume payments – like insurance premiums or repayments, purchases via e-commerce stores, top-ups for digital wallets and transport tickets – by removing the friction associated with vouchers. It also enables access to those who don’t have or prefer not to use digital accounts for various reasons ranging from preferring to “remain anonymous and without a digital record” to a “lack of trust in digital financial services”. 

How businesses can leverage cash payments with Stitch Cash

Stitch Cash gives consumers far more choice in how they wish to pay, enabling them to access digital products and services via cash payments, at ATMs across South Africa.

With Stitch Cash, tasks like making a deposit into a wallet-based app, or purchasing transport tickets, can be carried out conveniently at a local ATM. Funds paid are instantly allocated to a customer’s digital account, and businesses enjoy seamless reconciliation on the backend.

Stitch Cash enables businesses to:

  • Accept cash deposits made at ATMs across SA 
  • Receive instant notifications for any transaction completed
  • Automatically attribute payments to the customer's account 
  • Reconcile cash payments seamlessly alongside other Stitch methods

Here’s how it works:

  • Customer opens the app or site they wish to pay into
  • Customer selects cash as a payment method
  • Customer enters the amount they wish to pay in cash 
  • Customer selects the bank of the ATM they wish to deposit into and is given deposit instructions
  • The amount paid is automatically allocated to the customer’s digital account
  • The business receives an instant notification confirming the amount paid and a unique reference for seamless reconciliation

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Enjoy seamless reconciliation and a simple integration process

Stitch Cash enables businesses to reconcile cash payments along with other payment methods, and instantly attribute payments to an individual’s account. This means that businesses can track all payment methods in one place, simplifying their reconciliation process.

Stitch Cash is available through the current Stitch integration, making it easy for businesses to add it to their payment options.

As more businesses embrace digital innovation, the ability to ensure that consumers are empowered with equal access to products and services will enable more businesses to stand out amongst competition and bring more customers into the digital economy. 

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