South Africa builds fast digital payments, but most people still use cash

South Africa is building faster digital payment systems, but most people still pay with cash. The South African Reserve Bank's 2026 Cost of Cash Research Study found that cash made up about 56% of consumer transactions by volume. That figure is based on 2024 data.

Why cash holds on

The article argues that people choose how to pay based on practical things. These include transaction fees, reliable internet, whether a shop accepts digital payments, and how easily money can be recovered when something goes wrong. Someone who keeps using cash is not necessarily resisting progress. They may be reacting to the cost and limits of the alternatives.

PayShap's slow start

PayShap is a bank transfer service launched in 2023 to make payments quicker and easier. It has faced barriers to adoption. These include differences in what each bank offers, pricing, and whether merchants accept it. Having a service is not enough if people do not understand it, cannot afford it, or have no reason to change their habits.

Banks upgrade, with AI on the way

At the BPC Client Conference 2026 in Cape Town this week, BPC chief technology officer Maxim Pavlov said banks must modernize without putting services at risk. He called it "evolution rather than revolution." Many banks run older technology that is costly to maintain and hard to change. A modular design lets a bank update one part at a time instead of rebuilding everything.

Pavlov also discussed AI tools that watch systems, spot possible incidents and recommend action. Other possible uses include fraud prevention, personalized customer service and financial advice. Earlier warnings could prevent outages, and better fraud detection could protect customers.

The open worries

The article notes that AI can make mistakes and raise privacy concerns. Customers may also be unsure who is responsible when something goes wrong. Avil Ruthipaul, chief information officer for lending products at Standard Bank, warned about a different problem inside companies. Decision fatigue can keep teams working on projects that no longer make sense, which builds up technical and organizational debt.

What to watch

The article says success should not be judged by transaction volumes or new platforms alone. It lists three tests:

• People can pay safely and affordably.
• Small businesses can accept digital payments without prohibitive costs.
• Services stay reliable when technology fails.

For shop owners and people who pay bills digitally, that means checking fees and how refunds or recovery work before switching. In some cases cash may still be the cheaper or safer choice.