South Africa Prepares for Major Cash System Reform to Reduce Costs and Improve Access

Johannesburg – December 15, 2025

The South African Reserve Bank plans to implement the largest cash system reform in the country in decades by creating a unified cash management company, expanding the use of white-label ATMs, and tightening oversight on cash circulation. This initiative aims to reduce costs and improve accessibility to cash, according to Bloomberg.

Cash Volume and Costs

More than 180 billion rand (approximately $10.7 billion) circulates through Africa's largest economy, accounting for 2.5% of GDP and nearly two-thirds of transaction volume, despite the ongoing growth of digital payment methods.

However, managing, transporting, and securing cash cost nearly 90 billion rand last year, a burden ultimately borne by consumers, with 13% of this cost attributed to crime.

“Cash Smart” Strategy

The Cash Smart strategy aims to ensure cash availability for low-income groups and rural residents facing limited digital payment options, often incurring costs up to five times higher than users in wealthier urban areas.

These reforms represent, according to the central bank, the most significant change in cash circulation mechanisms since ATMs were introduced over 40 years ago.

The bank expects cash usage to decline by 30% to 40% as the country reaches digitalization levels similar to those in India, Brazil, and the European Union.

Unified Cash Management Company

The proposal involves creating a jointly-owned cash management company that includes banks and retailers, similar to the Geldmaat model in the Netherlands, a joint venture among ABN AMRO, ING, and Rabobank to manage a unified ATM network.

The new company will model cash demand and distribution, eliminating an indirect support worth 480 million rand that private companies received for holding and circulating cash on behalf of the central bank.

Unified ATMs and Lower Fees

ATMs currently owned by banks like Capitec and FirstRand are expected to be integrated into the new company and converted into white-label machines accessible to customers of all banks at low or no cost.

Pradeep Maharaj, head of the central bank's payment modernization program, stated that this will lead to fully integrated operations and help reduce fees to near-zero levels.

Impact on Banks and Regulation

Although the changes may affect commercial bank revenues, the bank predicts that lower operating costs will offset this impact. The bank is also considering expanding regulation to include cash transport companies, retailers, and some payment service providers, potentially imposing new operating licenses, with a preliminary regulatory framework expected early next year.

Role of Retailers

The bank plans to engage major retailers like Shoprite and Pick n Pay - which recycle up to 100 billion rand annually in cash - to participate in the ownership of the new company and act as licensed cash distributors, which may yield operational and commercial benefits for them.

The bank presented the plan to banks this month and intends to begin consultations with industry experts starting in January, with full implementation of the strategy expected to take about three years.