South Africa plans 'Cash Smart' strategy for payments

The South African Reserve Bank has published a position paper outlining its 'Cash Smart Strategy' to ensure cash remains affordable, accessible, and ethical. The strategy addresses rising costs and fragmentation in South Africa's evolving hybrid payments system.

Three pillars of 'Cash Smart' reform

The South African Reserve Bank (SARB) introduces its 'Cash Smart Strategy' to maintain cash as a resilient, inclusive, and efficient public infrastructure in South Africa's evolving payments system.

Aligned with SARB's Strategy 2030, this framework aims to modernise the cash ecosystem while preserving its essential public-interest functions, recognising that cash and digital payments are complementary.

The strategy is anchored in three objectives: reducing the cost of cash by addressing inefficiencies, ensuring broad and equitable access across all areas, and embedding ethical, secure, and accountable stewardship of physical currency.

The SARB notes that market forces alone cannot guarantee these outcomes.

To implement this, the SARB proposes an integrated, ecosystem-wide regulatory framework.

This framework will establish clear 'rules of the road' for all key participants, including banks, non-bank service providers, cash-in-transit (CIT) operators, ATM deployers, retailers, and cash-to-digital networks.

It includes activity-based and proportionate licensing, along with minimum sector-wide standards.

This approach aims to reduce fragmentation, strengthen accountability, and ensure systemically important cash activities serve the public interest, supporting accessibility, affordability, and resilience across the cash ecosystem.

This paper acts as the policy rationale for future detailed regulations.

Cash's enduring role and rising costs

South Africa's payment system is rapidly transforming, yet cash remains foundational for everyday transactions, informal markets, and cash-reliant households.

It offers immediacy, universal acceptance, and resilience when digital systems fail.

The SARB views cash and digital payments as complementary within a hybrid ecosystem.

However, structural shifts are changing cash economics.

Changes in formal channels and distribution rationalisation risk making the ecosystem more expensive, less accessible, and fragmented.

The SARB's 2025 Cost of Cash Study indicates substantial annual costs, ultimately borne by consumers through indirect expenses like travel time and exposure to crime.

Unaddressed, these dynamics threaten cash affordability and accessibility for vulnerable groups.

The paper highlights core challenges including cost escalation, access threats, integrity risks, fragmentation, and limited system-wide visibility, necessitating reform to preserve cash's unique benefits.

Cash: A public good, not a relic

The SARB's 'Cash Smart Strategy' correctly redefines cash as a critical public infrastructure, moving beyond its perception as a mere legacy instrument.

This proactive approach is vital to counter market forces that would otherwise diminish access and affordability, particularly for vulnerable segments.

Ultimately, the strategy ensures that South Africa's payment system modernisation prioritizes inclusion and resilience, rather than inadvertently creating a two-tiered society.