FNB Sees 360% Increase in Digital Payments Over Three Years, but Cash Remains Popular for Small Purchases

Despite a significant rise in digital payments, a new FNB report shows South Africa remains far from a fully cashless society, with cash still frequently used for smaller transactions. FNB reports a remarkable 87% drop in cash use for daily purchases over the past three years, highlighting the shift towards digital payments.

Ashley Saffy, head of spend and customer value management at FNB, revealed that digital payment usage surged by 360% over three years, climbing from R16.8 billion to R77 billion. Additionally, the cash-to-card ratio improved, increasing from 64% to 73%.

In total, FNB recorded R74 billion in digital wallet transactions, R43 billion spent through virtual cards, and R2 billion processed via PayShap. Despite this strong adoption of digital payments, Wandile Mnguni, FNB’s head of transactional banking products and payments, notes that cash continues to play a vital role, especially for minor purchases like a Coke, cigarettes, or a pie.

Mnguni points out that South Africa’s informal sector, including spaza shops and minibus taxis, still heavily relies on cash. Additionally, wages, salaries, and payments for household services often continue to be cash-based. “While cash usage has reached a turning point, it remains an essential part of life for many South Africans,” he explains.

FNB’s research findings show:

• 61% of individuals earning under R750,000 per year feel that cash is essential and cannot be replaced.

• 64% of respondents use cash for small transactions, though they prefer card payments.

• 50% pay in cash either due to limited merchant alternatives or because merchants request cash.

The South African Reserve Bank Governor, Lesetja Kganyago, also noted in a recent discussion on payment trends that the central bank’s 2023 Payments Study Report reaffirmed the popularity of cash, with many seeing it as the easiest and most affordable payment option.