Cashless transactions such as electronic fund transfers and Internet banking are on the increase worldwide – however, the need for cash and the means to pass it from person to person still trumps its electronic equivalents, especially in Africa.
This conclusion is borne out by the growing success of Instant Money, a service powered by Standard Bank that was launched in March last year – and has already recorded more than 100 000 transactions. About 35% of those using the service are repeat users, indicating that they consider it to be safer and easier than previous methods of transferring cash over long distances.
Instant Money lets people send money using a cell phone to any friend or family member from Spar to Spar within South Africa. At R9.95 per transfer, it is the cheapest transfer solution on the market and growing by 40% month-on-month.
It is estimated that only about 11-million South Africans have a bank account – just over one-fifth of the country’s population. In contrast, more than 35-million people own a cell phone, driving Instant Money’s popularity among lower LSM groups.
“A remittance culture prevails in these groups, making it necessary for them to send money from the economic hubs where they work to relatives living in remote areas,” says Ricardo Platt, business development manager for Instant Money. “Instant Money has been developed in such a way that the service can be accessed on even the simplest mobile phone models and across networks.”