With cheque card swipes having exceeded cash withdrawals at ATMs for the first time in 2013, FNB expects that this trend will accelerate rapidly through 2014.
Irlon Terrblanche, CEO for FNB Core Banking Solutions, comments: “For customers earning between R100 000 and R1,1-million per annum, we are seeing a rapid movement away from cash. In December last year, cheque card purchases were R3-billion higher than cash withdrawals.
“The gap between purchases made with bank notes compared to cheque cards dropped back to R1-billion in January this year as consumer spending declined after the festive season.
“However, by the end of 2014 we predict that the monthly average difference will be R2-billion. ATM cash withdrawals have been flat for the past three years even though the FNB customer base in this segment has increased significantly. To encourage this change in banking patterns we paid out more than R43-million worth of eBucks for cheque card swipes in December 2013,” Terblanche adds.
For FNB the benefit lies in reducing the costs of transporting cash to ATMs. The bank plans to increase its eBucks rewards to customers for using their cheque cards for purchases or Cash@Till for withdrawals. This will come into effect when the bank revises its pricing at the end of June.
“While we do not foresee the demise of bank notes, the costs of handling physical cash are very high; both for banks and retailers. By removing cash we are creating greater efficiencies in the payment system where all parties benefit,” Terblanche says.