Report: Consumer preferences South Africa - Cash
Despite being a highly banked population, many South Africans still withdraw a significant portion of their salaries in cash in order to transact. To better understand how consumers in South Africa are thinking about cash, we commissioned a survey asking how they see its role in the payments landscape, what would convince them to switch to digital payments, and more.
The payments landscape in South Africa is at an interesting crossroads: since 2011 it has seen an explosion in bank account ownership, leading to the rapid growth in a range of payment innovations from contactless to e-commerce.
However, cash has remained staunchly appealing to South Africans. As many as 95% now have a salary paid into a bank account each month, but many of them withdraw all or most of it as cash for day to day transactions. The desire to pay with physical currency holds true even for online purchases in many cases.
The continued appeal of cash seemingly runs counter to the pro-innovation direction of transactions we can see among South Africans generally, so we wanted to understand it better. To do so, we commissioned a survey of over 330 South Africans to understand how and why they use cash, how they see its role in the payments landscape and what would lead them to switch to digital payments.
Read some of our key findings below, or download the full report here.
Top findings: Cash in South Africa
Cash remains a preferred payment method in South Africa
Even as digital payment methods have grown in popularity in recent years, cash remains dominant. Our research found that South Africans use cash regularly, typically on a weekly or even daily basis.
Perhaps more notable, however, is the volume of cash they used. Our findings indicated most South Africans are withdrawing more than half of their wages as cash in order to transact. Of course, this may be due in part to opportunity - not every business is well set up to accept cards or digital payment methods, but questioning our respondents highlighted that many remain distrustful of newer payment methods and see cash as the safe option.
Many South Africans do plan to move away from cash
South Africans indicated they plan to move their spending more towards digital payment methods over the next 12 months. This is in line with what we would expect, as newer and more convenient methods emerge and begin to gain prominence.
However, the difference between stated intentions and past behaviour adds a caveat to this finding, as 42% of respondents said they had actually decreased their use of digital payment methods in the prior 12 months. The trend may be toward increased adoption for digital methods, but getting there cannot be taken for granted.
Easier payment processes are consumers’ top priority for digital payments
As we’ve seen with our research into other areas of digital payments, consumers’ priority when it comes to choosing digital methods is convenience. Much of the preference for cash looks likely due to a lack of opportunities for digital payments and a certain lack of comfort with newer options. The key to helping people to overcome their reticence is to make their payment experiences as easy as possible.
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How does in-person spending differ from online? Why do people say they prefer cash? What concerns need to be addressed around the safety of digital payment methods? Learn about these issues and more. Read our full report.
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