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SA ATM cash withdrawals slack off after strong holidays

May 13, 2013

Spending and cash withdrawals by South African consumers cooled in April, following a spike in withdrawals during the March holidays, according to the latest statistics released by South African ATM deployer, Spark ATM Systems. 

The Spark Cash Index measures the average value of cash withdrawals across more than 2,000 Spark ATMs throughout the country. In April, the index revealed a month-on-month drop of 0.73 percent in April to R461.65 ($50.46) per transaction. However, the SCI also revealed that year-on-year withdrawal activity increased by 6.01 percent.

Ronel Oberholzer, principal economist of sub-Saharan economics at IHS Global Insight, said that a trend line through the annual figures shows a clear uptrend, which is encouraging for the economy going forward.

"Interestingly, if one draws a linear trend line through the monthly changes, one clearly sees that a gain in one month is often negated in the next month. The average growth percentage in cash withdrawals from 2012 until now is only about 0.16 percent which, although a positive figure, translates into the possible slowing of consumer disposable income," she said.

Ryan Tzamtzis, operations manager of Spark ATM Systems, said that although the uptrend is promising for the local economy, the country has seen that the consumers' use of unsecured credit is starting to slow. "Optimism may also begin to fade as the consumer finds his use of credit reaching its ceiling and as a result South Africans are having to cut back on spending following the holiday period."

Tzamtzis also says that growth in average cash withdrawals recorded in the SCI for 2013 is likely to remain in the lower digits for the remainder of the year as increased food, electricity, transport costs and debt repayments eat into expendable cash flows.

Read more about trends and statistics.