South Africa's central bank is planning the biggest reform of the country's cash system in decades, proposing a new cash-management company, white-label ATMs and tighter oversight of how physical money moves through the economy.
Cash in circulation exceeds R180 billion, about 2.5% of gross domestic product, and still accounts for roughly two-thirds of transaction volumes despite growth in digital payments. Managing, transporting and securing cash cost about R90 billion last year, with consumers bearing most of the expense. Crime accounts for about 13% of those costs.
The initiative, known as the Cash Smart Strategy, aims to make cash cheaper and easier to access, especially for low-income and rural communities that rely heavily on physical money and often pay higher fees than urban users.
At the center of the plan is the creation of a cash utility jointly owned by banks, retailers and other stakeholders. The entity would manage cash demand and distribution and operate a shared ATM network, similar to the Netherlands' Geldmaat system.
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Existing bank-owned ATMs would be transferred to the utility and converted into white-label machines usable by customers of any bank at low or zero cost. The central bank is also considering new licensing and standards for cash-in-transit firms, retailers and payment providers. Full rollout could take up to three years.
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Key Takeaways
The proposal reflects a shift in how regulators view cash in an economy moving toward digital payments but still dependent on physical money. While the central bank expects cash use to fall by 30% to 40% over time, it sees cash as essential for financial inclusion, especially where digital access is limited. The plan could reshape revenue models for banks that earn fees from ATM usage but may lower their overall operating costs. Retailers such as major grocery chains, which already recycle large volumes of cash, could gain a bigger role as licensed cash wholesalers with direct access to supply. For consumers, the main impact would be lower fees and wider access to ATMs, particularly outside major cities. For the central bank, the reforms may reduce seigniorage income but strengthen oversight and efficiency. If implemented, the strategy would mark a structural reset of South Africa's cash ecosystem, balancing cost control, access and safety as the country transitions toward a more digital payments landscape.
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