Spark ATM Systems, a South Africa-based independent ATM deployer (IAD), today reported that its cash index for March was slightly above the same period last year despite a recent hike in fuel costs. March's performance surprised Spark ATM executives who expressed cautious optimism about future spending.
The Spark Cash Index, which measures average cash withdrawals from the Cape Town-based IAD's 1,100 machines, reported that in March the average cash withdrawal was R403 (U.S. $60.27) compared with R396 (U.S. $59.22) in March 2010. South Africa's currency is the Rand.
In the first quarter, which includes January, February and March, the Spark Cash Index reported that cardholders withdrew an average of R405 compared with an average cash withdrawal of R397 in 2010's first quarter. Cardholders withdrew slightly fewer funds from Spark ATMs in March compared with January and February of this year. In February, cash withdrawals averaged R404 and in January, they averaged R407. Last year, cash withdrawals in February averaged R396 and in January, they averaged R400.
Spark ATM officials noted that the first quarter is traditionally a weak period for ATM cash withdrawals because it follows strong spending during the Christmas holidays. Last Christmas, cash withdrawals peaked at R447, the highest since the launch of the Spark Cash Index in September 2007.
"The dip in March was largely in line with expectations," said Marc Sternberg, managing director of Spark ATM Systems. "It's definitely a continuation of the relationship between February and March that we've seen over the last couple of years."
Sternberg explained that company officials expected a larger drop in cash withdrawals in March.
"What is interesting is that consumers in March had to contend with a large petrol price increase and the possibility of interest rate hikes later this year," he added. "If anything, we may have expected a larger dip in cash withdrawals in March."
April traditionally has brought better news when it comes to spending, he said.
"We traditionally see a mini spike in cash withdrawals in April," Sternberg said. "With quite a number of public holidays coming up as well as the Easter period, it is possible that consumers held back somewhat in March ahead of an anticipated splurge over the upcoming long weekends."
Spark ATM Systems deploys its ATMs primarily in service stations, convenience stores, specialty stores, leisure and hospitality locations
