Do ATMs Still Have a Role in South Africa’s Digital Banking Future?

South Africa’s banking sector is undergoing a major transformation as leading institutions pivot toward digital-first strategies. Standard Bank, Absa, FNB, and Nedbank are actively scaling down their ATM infrastructure, signaling a decisive move away from cash-based services. In contrast, Capitec Bank is defying this industry trend by expanding its ATM footprint, focusing on accessibility and inclusion in communities where physical banking still matters.

Strategic Divergence in ATM Deployment

Recent data reveals a clear divide in strategy. Nedbank’s interim results for the six months ending June 2025 show a drop in its ATM count from 4,199 at the end of 2024 to 4,028 by mid-2025. This follows a five-year trend among major banks, which have collectively removed 8,516 ATMs. Standard Bank led the pullback by reducing its machines from 9,321 in 2019 to 5,562 by the end of 2024. Absa and FNB also cut a number of ATMs from their networks over the same period.

Capitec Doubles Down on Physical Access

Capitec, however, has taken a fundamentally different approach. Over the past five years, it added 3,787 ATMs to its network, bringing its total to 8,798 as of December 2024. This expansion has helped cushion the nationwide drop in ATM numbers, resulting in a net reduction of 4,729 across the five major banks.

This strategy reflects Capitec’s commitment to serving customers in both urban and underserved rural areas. Although the bank supports digital banking, it emphasizes that cash still plays a vital role for many South Africans. In a statement, Capitec said, “We believe that real service means showing up where it matters most in the heart of communities.” By expanding its ATM and branch presence, the bank aims to reach more customers in areas with limited digital access.

Digital Payments on the Rise

Meanwhile, consumer behavior continues to shift rapidly. Discovery Bank and Visa’s SpendTrend25 report indicates that 67% of South Africans use cash only when absolutely necessary or not at all. Increasing trust in online banking and the convenience of mobile platforms are encouraging more people to opt for digital payments. Furthermore, high costs related to cash handling from transport to security are pushing both consumers and businesses toward digital alternatives.

Smarter ATMs

Despite reducing its physical access points, Standard Bank has invested in smarter ATMs. Kabelo Makeke, head of personal and private banking, explained that these new machines are more efficient and offer expanded services such as bulk cash recycling and real-time processing. These upgrades are designed to complement the bank’s broader digital transformation without eliminating cash services entirely.

Absa has also significantly trimmed its ATM footprint, cutting more than 3,500 units from its network, which now totals 5,138 machines down from 8,656 in 2019. FNB followed suit, closing over 1,000 ATMs in the same period. Nedbank’s more modest reduction aligns with its efforts to match infrastructure with shifting customer preferences.

Balancing Innovation with Inclusion

Capitec continues to stress that eliminating cash access too quickly risks marginalizing parts of the population. The bank reaffirmed its intent to provide cash in an affordable and accessible way “for as long as it’s needed.” These efforts aim to ensure that clients who still depend on physical banking are not excluded from essential financial services.

In my view, Capitec’s strategy makes practical sense. South Africa has not yet achieved universal internet access or full smartphone penetration. Digital inclusion still requires coordinated national efforts. Recently, telecom operators announced plans to phase out outdated 3G services in favor of 4G and 5G. Government and other stakeholders have warned that this move could sideline millions who rely on basic mobile technology. Within this context, Capitec’s ATM expansion is not just rational it serves vulnerable communities and helps ensure no one is left behind during the digital transition.

Multiple Strategies for a Diverse Market

The stark contrast between Capitec’s physical expansion and the ongoing consolidation by its peers highlights a broader challenge in South Africa’s financial system: how to modernize banking without excluding vulnerable populations. Digital platforms are advancing swiftly, yet a sizable segment of the population still depends on traditional, physical banking infrastructure.