Contrary to what the declining number of ATMs might suggest, cash remains king, particularly during the holiday season.
According to the latest data from BankservAfrica, the December 2024 holidays lived up to their reputation as a peak shopping period, with spending showing strong growth. Demand for cash remained high, with the total value of cash orders processed through BankservAfrica’s Integrated Cash Management Service (ICMS) reaching R87.7 billion in December 2024.
BankservAfrica’s ICMS data reflects near real-time cash orders and intra-day settlement transactions between commercial banks, as well as between the South African Reserve Bank (SARB) and commercial banks. The system provides the SARB with a national view of cash in circulation, detailing quantity, quality, currency denomination, and geographic distribution.
Solly Bellingan, the head of marketing at BankservAfrica, highlights a nearly 4% increase from R81.5bn in December 2023.
“This figure remains high, showing the persisting seasonal demand for cash among South Africans,” says Bellingan.
Cash orders peaked on 2, 13, and 27 December, with values of R5.2bn, R6.7bn, and R5.8bn, respectively.
“Similar to what we’ve observed in previous years, cash orders surged in the lead-up to the public holiday on 16 December, as banks ensured the adequate availability of physical notes and coins for the busy season. The other major day was 27 December, with cash orders reaching R5.8bn ahead of New Year’s Eve celebrations,” says Bellingan.
He adds that the continued year-on-year increase highlights December as a significant contributor to economic activity.
“The month also reflected steady spending patterns following Black Friday’s strong performance.”
Festive cheer spreads across the digital marketplace
While cash remained a top choice, online shopping also saw impressive growth. Data from BankservAfrica’s 3D-Secure online card authentication service showed a 30% year-on-year increase in transaction volumes, with the total value 50% higher than in 2023.
These figures do not include online purchases that did not require a one-time PIN, because those transactions are included in total transaction volumes.
“The strong performance reflects the increasing appeal of online shopping. Convenience, paired with competitive holiday offers, sparked a surge in seasonal spending and highlighted the growing reliance on e-commerce,” says Bellingan.
The highest online spending volumes were recorded at mobile network operators for digital and connectivity services, followed by entertainment spending at online betting and gambling outlets, and purchases at online grocery stores and large retailers.
Essentials topped the list for card spend
BankservAfrica’s card data shows that South Africans prioritised essentials over the holidays, with food, necessities, and transport leading spending categories. The average card spend per transaction was R588.
BankservAfrica does not process interbank transactions for all banks, meaning its data provides only part of the overall picture of December transaction volumes. Additionally, “on-us” transactions – where both the cardholder and merchant bank with the same institution – are not included in the dataset.
An analysis of shopping trends across key categories found that the highest spend was at grocery stores and supermarkets, followed by fuel purchases at service stations and dining out at restaurants.
“Card spending remained robust, with most of it centred on everyday items, perhaps signalling how South Africans are choosing to prioritise their spend in the current economic environment,” says Bellingan.
However, not everyone was frugal. According to BankservAfrica’s data, one shopper made a R175 000 luxury purchase at a jewellery store.
Discovery Bank’s client transaction data further supports the trend of increased holiday spending. According to chief executive Hylton Kallner, Discovery Bank clients spent an average of 15% more in December than in other months of 2024.
“From our analysis, banking clients also spent 7% more compared to the same period in 2023,” says Kallner.
“Some of the top categories of increased spend included 62% more on outdoor activities, 51% more on movies, 32% more on children’s toys, 26% more on eating out and takeout, and 15% more on clothes in December than the rest of 2024.”
Kallner also noted an interesting pattern shift between December and January.
“It’s fascinating to see the change in behaviour, comparing spend on alcohol in December to stationery in January, as many South Africans return to work and daily responsibilities in the new year.”