Cash on the decline? Most SA banks slash ATMs except one

Over the last five years, most of South Africa’s leading banks have been shutting down their ATMs across the country, with the notable exception of Capitec, which has continued to operate its machines.

MORE CUSTOMERS, LESS ATMS

Interestingly, there has been a big increase in banking customers in the country. This is due to an increase in more affordable entry-level banking products. However, this has seemingly not impacted banks closing their ATMs. There are an estimated 8 000 fewer ATMs available for the country’s oldest banks, e.g. Absa, FNB, and Standard Bank.

Capitec is the only major bank that grew its number of ATMs. It had 5 011 in 2019 and now has 8 382, according to MyBroadband.

Additionally, what makes the closing down of ATMs stranger, is the fact that many South Africans still withdraw a significant portion of their salaries to transact in cash. So, cash is still popular despite an increase in online banking.

A recent report by Stitch showed that around 95% of the survey participants have their salaries paid into a bank account and many of them withdraw all or most of it as cash.

“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.”

Stitch

RETAILERS OFFERING CASH WITHDRAWALS

A reason for a decline in ATMs despite many people using cash, is that many retailers offer customers cash withdrawals. Many banks have opted for this channel for withdrawals and deposits.

There are clear benefits to using this option. Firstly, it is convenient as customers can draw cash at the same time as paying for their shopping. Secondly, having a cash point inside a store makes it far more difficult for criminals to rob or compromise with skimming devices.

WHAT ARE THE BANKS SAYING?

Absa said that the overall demand for ATM services has decreased, largely due to the growth of e-commerce and customers’ migration to digital banking. Also, Absa has experienced bombing of certain of its ATMs sites, for which replacement units were not feasible.

Capitec said that despite the increase in digital options available to clients, there is still enough demand for their ATMs to make it feasible.

FNB continuously evaluate device placement, which is driven by local market alignment and device economics. They are installing more ADTs (automated deposit tellers).

Nedbank has removed 62 ATMs over the last two years. They have, however, observed an increase in demand for their ATM services, including by non-Nedbank customers.