South Africa's Reserve Bank to Launch Free ATM Transactions and Unify Cash Machines

In a significant move aimed at enhancing financial accessibility, South Africa's Reserve Bank has announced plans to introduce free low-value ATM transactions and unify over 30,000 cash machines into a shared, unbranded network. This initiative is part of a broader strategy to streamline the country’s fragmented cash infrastructure and reduce the costs associated with cash handling.

The Reserve Bank is set to pilot white-labelled ATMs starting in January 2027, with the first machines expected to be operational by the end of 2026. Pradeep Maharaj, the executive director of the Payments Ecosystem Modernisation programme at the Reserve Bank, emphasized the goal of ensuring that all ATMs support essential functions such as cash deposits, withdrawals, and balance inquiries. Transactions below a yet-to-be-determined threshold will be offered free of charge.

Currently, approximately 9,200 of South Africa's 30,600 ATMs are operated by independent deployers, many of which do not accept cash deposits. The proposed model aims to provide customers with a more standardized network, allowing access to ATMs regardless of the bank or operator. Maharaj criticized the fees imposed when customers are forced to use ATMs outside their bank's network, labeling them as disloyalty fees.

The Reserve Bank plans to review alternative models submitted by banks in November 2026, with the aim of launching the ATM pilot in January 2027 and establishing a national cash utility by March 2027. This utility will consolidate cash centers, transport routes, and cash management systems that are currently operated separately by banks and cash-in-transit companies. By improving efficiency in cash handling, the Reserve Bank hopes to lower operating costs across the cash supply chain.

The need for reform comes as South Africa grapples with the high costs associated with cash transactions. A study by the Reserve Bank estimates that the economic burden of handling cash amounts to R88.5 billion annually, which is roughly 1.2 percent of the country’s gross domestic product. The impact of these costs is felt most acutely by low-income households, who spend a significantly higher percentage of their income on cash-related expenses compared to wealthier individuals.

Maharaj noted that the cost of cash must decrease by at least 30 percent for the current system to remain sustainable. Without structural changes, the financial burden of maintaining existing cash infrastructure is expected to continue rising, leading to the closure of ATMs and bank branches in rural and low-income areas, creating so-called cash deserts.

Despite the push towards digital payments, the Reserve Bank has reiterated its commitment to maintaining cash as a vital part of the financial ecosystem. Cash transactions still account for 56 percent of consumer transactions by volume in South Africa. Maharaj stated, “Cash is a public good and core to inclusivity,” rejecting the notion that the country is moving towards a cashless society.

The proposed national cash utility aims to enhance the resilience of the cash distribution system, which is currently vulnerable to disruptions caused by the insolvency of major cash logistics companies. Unlike the national payments infrastructure company, PayInc, which the Reserve Bank partially owns, the cash utility is expected to be wholly owned by the central bank, although the final governance structure may still evolve.

In addition to the ATM reforms, the Reserve Bank is also working on standardizing digital payments through initiatives like PayShap, which currently processes around 60 million transactions monthly. The central bank aims to increase this number to 500 million transactions per month by 2029, with plans to make smaller digital payments free and introduce a standardized QR+ payment code.

As South Africa's financial landscape evolves, the immediate challenge will be for the Reserve Bank and commercial banks to agree on a model that effectively reduces fees and operating costs while ensuring that cash remains accessible to communities that depend on it.