Cash remains the preferred method of transacting for local consumers.
According to Marc Sternberg, MD of Spark ATM Systems, cash volumes in the country continue to grow significantly. Recent figures released by the South African Reserve Bank show that total cash in circulation in SA increased 13% year-on-year, from R72.90 billion in March 2012 to R82.19 billion in March 2013.
Spark ATM Systems' data suggests consumers at the lower end of the income spectrum are driving the higher cash withdrawal volumes, he points out.
This view is backed up by a recent FinScope survey, which found that 88% of the banked population use automated teller machines (ATMs) once a month as their primary means of accessing cash, while 25% obtain cash at stores via debit cards.
SASSA cards drive ATM transaction
The use of South African Social Security Agency (SASSA) debit cards to pay social grants in SA has had an impact on the ATM landscape, notes Sternberg. These cards allow beneficiaries to access their social grants anywhere in SA, via traditional banking channels.
"SASSA cards now represent 14% of our transaction volumes, up from nil just 18 months ago. The introduction of these cards represents a huge injection of new customers into the formal banking and ATM system.
"This has, in turn, driven significant demand for convenient ATM services, with Spark installing a record 496 ATMs in the first eight months of 2013," he said, adding that most of these were installed in rural and peri-rural areas, indicating a strong demand for cash by the previously unbanked.
The FinScope survey revealed that the new SASSA card system contributed to an increase in the banked population, particularly at the bottom of the pyramid, where ATM/debit card usage increased from 52% in 2011 to 61% in 2012.
The peak withdrawal day for the entire ATM industry has moved from the last Friday of the month to the first day of the month - SASSA grant payment day. This has been driven by the near 10 million new SASSA cardholders, says Sternberg.
Many Spark merchants who host ATMs have called for SASSA payments to be staggered across multiple days to alleviate the strain on their businesses and to ensure the social grant congestion does not coincide with month-end, he noted.
Key statistics
Spark ATM Systems also released its latest Spark Cash Index (SCI), which measures the key cash withdrawal statistics across more than 2 200 Spark ATMs throughout SA.
The latest SCI for August 2013 revealed an 8.48% year-on-year increase in average cash withdrawal values, to R471.81. This also reflects a 1.97% month-on-month growth, from R462.70 in July.
The Northern Cape recorded the highest average cash withdrawal value (R497.91) for August 2013, followed by KwaZulu-Natal (R494.14) and Mpumalanga (R490.06).
These provinces have higher withdrawal amounts due to the remittance income that flows from metro areas to rural areas. The Northern Cape displayed the highest year-on-year growth rate of 15.79%, it adds.
KwaZulu-Natal recorded the highest growth (3.89%) in month-on-month withdrawal values, followed by Mpumalanga (3.52%).
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