Back in the days, when there were no bank accounts, people used to save their money under the mattress. Cash was the only way to do business and if it was lost it or you were robbed, well, that was just the risk you took having to carry it everywhere.
Nowadays, savings accounts, electronic fund transfers (EFTs), bank cards, digital and mobile banks, and apps like SnapScan and Zappa make the idea of cash seem outdated. Yet many people still use physical money, insisting on visiting the ATM every payday. Why is this?
Hippo.co.za takes a look at the different kinds of payment methods available to find out why cash is still king for many.
EFT and cards
Every year, billions of rands are spent on maintaining and improving banking security. EFT is common enough now that we rely completely on an automated programme to pay our debts and bills on time every month via debit orders. We swipe our bank cards for everything, from buying a loaf of bread to buying a lounge suite. It seems logical to use electronic and card payments whenever possible, but here's the problem: 32% of South Africans don't have a bank account. Despite the technological advances of banking, most banks still require people to physically visit a branch to open up an account.
Digital and mobile banking
M-Pesa, a mobile banking service, has revolutionised banking in many African countries with its mobile approach, including Kenya, the DRC, Mozambique, and Tanzania. Last year, it was reported that 6.4-million people in Tanzania actively used M-Pesa, and the company holds a quarter of the share of all global mobile-money users.
In 2018, FNB launched eWallet eXtra. With it, any South African can open and manage a bank account on any feature phone or smartphone without needing to visit a branch to do it.
Tyme Bank, a new player in the market, is entirely digital and has no monthly fees because they don't have branches that need to be funded. Instead, they have kiosks at selected supermarkets with whom they've partnered.
In some parts of Africa, these mobile and digital banks have certainly overtaken traditional banking and even cash. However, because they are still relatively new entrants into a very old industry, people are still wary of keeping their hard-earned money with a company or technology that they can't yet entirely trust.
Apps like SnapScan and Zapper are popular for many reasons. For example, you can leave your wallet or purse at home. In addition, they're easy to use – you download an app, input your bank card information, and scan a QR code at the retailer. But these apps are only compatible with smartphones, and many South Africans only own feature phones.
Despite its popularity, cash is risky and potentially inconvenient to use for larger transactions. If you're hesitant to use modern mobile banking tech or don't trust an app to pay someone the right amount of money, there is always the option of having a reliable savings account that can keep your money safe and grow it. Compare accounts on hippo.co.za today and start saving!
Prices quoted are correct at the time of publishing this article. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.