Since 2020 South Africa has seen their ATM numbers drop from 34 400 to 26 400 which is more than 23%. There is one bank that has increased their number of ATM machines as their customer base is made up of the lower income group. The big 4 banks in SA have reduced their number of ATM's by as much as 60%.
There is definitely a worrying trend as SA is moving towards a cashless society at a rapid pace. The banks use the excuse that they have seen a drop in demand due to cashless payment apps on smart phones. There is roughly R180 billion in cash circulating in South Africa and a vast majority of that will be held by the informal sector. The narrative is that more people are using payment apps and if you saw the queues at the ATM's at the end of the month or Friday afternoons then you would think otherwise and see this for what this is being a forced change. The masses use cash and this is not going to change as those they transact with see cash as a proof of payment and this 3rd world thinking is what is going to stop the government in their tracks. The people are simple with many uneducated and convincing the masses to change is not going to happen.
Crime is still a major problem in society with the above photo taken from a cash in transit robbery that took place yesterday. Another 2 happened last week so this is all too common and this means that cash for banks is becoming more expensive to service. The costs and insurances of transporting cash and topping up ATM machines is now becoming a burden on the banking system.
Banks cash volumes have started declining due to demand with this year volumes rising by a meagre 3% compared to card volume usage increasing by 18%. The masses do not trust the banking system and everything they do is via cash. the daily transport is on a cash basis and the taxi operators will not accept any other form of payment. The obvious reason is this is a tax free business and having a bank account linked to thousands of payments monthly would highlight this to the tax man.
The government has a road map for a cash less society by 2030 and they are going to struggle to get the informal sector to buy into this plan. This is why they are forcing the informal sector businesses to register with the local municipalities so they can be monitored for taxing purposes. No one exactly knows how big this sector is and is like another world that no one has ever seen unless you are part of this sector.
The cash less society idea is not about the costs or risks of crime, but more about controls the government has and everything else is the noise. You would think that it would be easy to protect the cash in transit vehicles by having police convoys but having these types of crimes helps them with their cash less narrative. The bigger picture is that they know they can force those not paying taxes into paying taxes which is reported to be valued at over 35% of the current GDP.
The South African Revenue Services is running out if ideas on where they can grow their revenue as they have reached a tipping point on business and personal income taxes. Over the last few years they have introduced hidden taxes like the new tyre tax where a R2.30 per kilogram tax was built in on all tyre purchases.
Personally I am one who is happier to deal in cash and it will be a sad day if that choice is removed. We have crypto which is something the government has no idea about and they will wish they had kept their cash. Having no cash will not change things as the informal sector will be full on crypto payments as they cannot afford to register their businesses due to the tax implications.