South African Banks Shut Down ATMs Amid Increased Digital Banking Adoption
Banks in South Africa are reportedly closing ATMs due to including increased digital banking adoption, as more customers transition to online and mobile banking.
An analysis from BusinessTech highlights a decline in the number of ATMs in the country, with the count dropping from 33,171 in 2019 to 28,967 in 2023/2024. The demand for physical ATMs has reportedly diminished as more customers move to online and digital banking.
Additionally, the increase in ATM-related crimes such as vandalism and theft has made it more challenging and expensive to ensure the security of these machines.
According to the Outlier, Absa Bank which had the highest number of ATMs in 2019, shut down nearly 3,500 of them as its customers shifted to eCommerce and digital platforms. The majority of closures occurred between 2020 and 2022.
The bank further noted that its ATM footprint has however witnessed a slight reduction in numbers primarily due to violent crimes, including ATM bombings, making it impractical to replace certain units.
First National Bank (FNB) one of South Africa’s “big four” banks, saw its ATMs reduced from 5,780 in 2019 to 4,790 in 2023/2024. Nedbank recorded a notable decline in ATMs from 4,257 to 4,199 in 2023/2024. Standard Bank saw its ATM reduce from 9,321 in 2019 to 2023/2024. The bank is upgrading its ATMs with new technology to improve transaction speed and service quality. The new ATMs have enhanced capacity and offer additional services, such as real-time acceptance, validation, and recycling of bulk cash.
In contrast, Nedbank recorded a modest increase of 19 ATMs since 2019 despite removing 62 outdated devices within the past two years. The bank highlighted a growing demand for ATM services, even from non-Nedbank customers. However, the bank acknowledged the rising popularity of digital payments and transfers, which it noted may potentially impact future ATM transaction growth.
Notably, the emergence of alternate cash access points, such as TymeBank’s network of 15,000 service points at major retailers and in-store kiosks, has contributed to the decreased reliance on traditional ATMs.
As digital solutions become more prevalent and sophisticated, the banking industry is likely to continue evolving. The decommissioning of ATMs in South Africa is a clear indicator of this shift, signaling a future where digital banking is at the forefront, and traditional banking methods gradually become obsolete.
Source: Business Tech
