The true cost of cash is R88.5bn a year, and the poorest pay the biggest price

Cash is king, the old saying goes, but using it in today’s increasingly digital world is proving more expensive than many South Africans might imagine.

Despite the expansion of digital payment systems, cash still accounts for 56% of consumer transactions by volume, according to the South African Reserve Bank (SARB).

A recently published SARB study sheds light on how much South Africans pay to access and use cash, with costs extending well beyond transaction fees.

Those charges alone are substantial. The report estimates that South African consumers incur R17.7 billion a year in cash withdrawal fees and R13.3 billion in cash deposit fees, adding up to R31 billion.

However, the broader annual cost of cash to consumers is estimated at R88.5 billion once other, less direct expenses are taken into account.

The study estimates that time spent accessing and using cash costs consumers R27.8 billion a year, while travelling to withdraw cash adds another R12.5 billion. Retailer cash-related costs and forgone interest contribute a further R3.9 billion and R1.3 billion, respectively.

Cash-related crime is another significant expense, with the study estimating its annual cost to consumers at R12 billion.

Lower-income households bear the brunt

Perhaps the most sobering finding is the disproportionate burden cash-related costs place on lower-income households.

People earning less than R1,250 a month are estimated to spend around 5% of their income on cash-related costs. Those earning between R5,000 and R8,000 a month spend about 3%, while the proportion falls to 2% for those earning between R13,000 and R20,000, and 1% for people earning more than R20,000.

The study also found that 55% of people earning less than R1,250 a month rely exclusively on cash, compared with just 1% of those earning R20,000 or more.

These findings highlight a financial-inclusion challenge: people with the lowest incomes are often the most reliant on a payment method that can consume a significant share of their earnings.

Cash is king in the informal economy

Cash remains particularly important for everyday transactions in the informal economy. Consumers use it for 66% of transactions at spaza shops and 65% of taxi payments, according to the study. Cash also accounts for 45% of mobile airtime purchases and 51% of religious payments.

The cost of accessing cash varies considerably by channel. The study estimates that retailer cash-back services cost 12 cents per R100 accessed, compared with 68 cents at ATMs and R1.53 at bank branches.

To reduce costs and improve access, the SARB recommends expanding cash-back services at retailers, encouraging shared cash infrastructure and cash recycling, and improving ATM access in underserved areas. It also calls for a comprehensive study comparing the costs of cash, card and digital payments.

The report is based on 2024 data and draws on industry cost data, stakeholder interviews, consumer research and economic modelling. Some of its figures, particularly those relating to time and other indirect costs, are estimates rather than directly observed expenses.

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