A more cash-efficient
ecosystem in a post-
COVID world

Thabo Makoko Author

Thabo Makoko

Head: Cash Management:
Africa, Absa CIB


While operational conditions in the South African economy remain constrained, there is encouraging data emanating from our cash management environment, giving us reason to be optimistic about the second half of 2023.

This will be further supported by an increasingly more cash-efficient and competitive digital ecosystem which will put more power into the hands of consumers and businesses.

If we analyse the data coming out of the market at present, the South African economy is proving robust, with cash transaction volumes returning to pre-COVID-19 lockdown levels. This is particularly noticeable in sectors including tourism and gaming. These are important sectors to track as they typically reflect 2 key factors: income from foreign tourists and increased disposable income.

While the average South African is feeling the pinch from rising interest rates and inflationary pressures, the post-lockdown environment has contributed to increased cash transactions in a few unexpected ways. The first being the work-from-home or remote working environment which meant that many South Africans are spending less on fuel and transport and in turn, now have more disposable income. Secondly, if we analyse the results coming out of the JSE-listed franchise and fast-food segments, or restaurant groups; loadshedding is a major contributor to people opting for eating out or food delivery options. The growing hybrid shopping model proves that retailers must now cater to growing online and in-store customer base who demand a seamless experience across these channels.

The total growth in online shopping revenue in 2022 was 35%, achieving R55bn in sales - this comes hot on the heels of the 40% growth in 2021. Checkers Sixty60 grew turnover by 150% from July 2021 to July 2022, while Pick ‘n Pay reported annual compound growth of 72,5% over the past two years*. Stats SA also confirms that retail sales showed a 9% growth compared to a 4% decline in 2020.


The financial results presented by restaurant giant Famous Brands touches on this, stating the following in its full-year financial results to end February 2023:

The advent of appealing, user-friendly apps and changing consumer expectations have unlocked food delivery as a sustainable category. The digital consumer is looking for convenience, options and simplicity, and the industry is leveraging data to create a holistic and interactive experience.”

While this specifically speaks to the fast-food industry, a factor which is becoming increasingly important is the role that technology is playing in making industries more cash-efficient and accessible to consumers. While South Africa has a globally recognised banking system, it is often forgotten how dominant cash transactions are.

Data released by BankservAfrica – the largest automated clearing house in Africa – shows that 9 out of every 10 transactions made in South Africa in 2022 were cash. For businesses of all shapes and sizes this comes with various operational challenges such as security, cash pilfering, as well as a lack of digitised records which impacts their ability to access finance.

According to research conducted by Boston Consulting Group, the number of people prepared to go “cashless” is increasing, but solutions will need to be convenient, accessible, secure and give power to the consumer while protecting their privacy.

The current value proposition for cash is that it’s viewed as a low-cost payment option for consumers, that is currently not impacted by challenges such as load shedding and transaction charges. Technology will play a key role in challenging the cash proposition to create viable alternatives for consumers.

Encouragingly, technology is becoming a game-changer in creating a more cash-efficient economy. In 2017 cash transactions in retail shops averaged 57% while card and wallet transactions were 47% combined, in 2022 cash transactions were 35% with the remainder now in the card and wallet ecosystem.

Large retailers have numerous cash touchpoints and provide elegant case studies for innovation.

The till-point is a perfect example. Not only can a consumer pay for their goods, but they can also pay for municipal services, load airtime, draw cash, as well as access SASSA grants. In 2022, the combined cash withdrawal value for retail giant Pick ‘n Pay was R8,1bn with R6.7bn of this being attributed to SASSA grants. Instead of waiting in queues and weighing on government infrastructure, technology has allowed for ease of access to cash transactions – saving the consumer time and money.

Virtual cards and wearable technology are changing consumer loyalty programmes and the way that consumers interact with retailers.

Behind the scenes, technology is also playing a key role in making organisations more efficient. Our partnership with ERP system provider SYSPRO is a good example of this. Inside of an organisation there are often multiple “hand-off” points for concluding payment transactions.

A new casual staff member, for example, needs to be onboarded by HR who might capture their account details manually before pushing this through to finance who will then manually capture information to perform the payment. Similar duplication happens when different divisions are required to load new vendors and suppliers.

By integrating Absa’s banking solutions with SYSPRO’s ERP system, we improved the efficiency of the process by removing duplicate tasks and reducing the number of man hours spent doing manual approvals, therefore freeing up resources to focus on core business imperatives.

As Africa’s leading Pan-African banking group, we have access to high quality data that allows us to assess the health of the economy. Our cash transaction data suggests that consumers are resilient despite economic challenges. Our job is to remain innovative to ensure that the consumer gets maximum “bang for their buck” in the growing cash-efficient economy.

Thabo Makoko Author
Thabo Makoko

Head: Cash Management: Africa, Absa CIB

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