It is not the form of payment that is the problem but the life chances given to the majority of people, writes Steven Heilbron
It is not the form of payment that is the problem but the life chances given to the majority of peopleWhat would happen tomorrow if we could turn SA into a cashless society with a wave of a magic wand? Far from turning the country into a crime-free paradise of low transaction costs and widespread financial inclusion, it’s more likely that chaos would reign in many communities as millions of South Africans found themselves financially excluded and unable to transact.
To create real financial inclusion we would need to facilitate an environment where children are born into stable and supportive family environments, have a roof over their heads, food in their stomachs, access to quality education and grow into adults who can participate in the economy through employment or entrepreneurship.
As a fintech company that offers quick access to retail lending, card acceptance, digital payments, cash management solutions and value-added solutions to both formal and informal merchants, Connect Group, have chosen to be agnostic about the payment instruments with which our clients choose to transact with their consumers.
The latest statistics from the Reserve Bank show the central role of cash in the economy, despite the drive to push digital payments. Between March 2020 and March 2021 cash in circulation grew 8.23% in value from R155bn to R168bn. We cannot simply turn this tap off without causing a range of unintended consequences.
Cash remains a key option for many retail merchants. For a spaza shop owner an inability to take cash would significantly damage this sector’s ability to trade. While the introduction of digital options is important in this arena and will grow in time, at present, cash underpins trade. In addition, many of their customers and some of their suppliers prefer cash too.
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