CIT heists: Is going cashless a viable solution?

Cash is seemingly a sought-after commodity in South Africa as cash-in-transit (CIT) vehicles become an instant cash cow for criminals.

If the increase in CIT heists in the past few months is anything to go by, moving money has proved to be a risky endeavour, causing some to wonder – why not just go cashless?

Digital alternatives such as mobile money, digital payments and central bank digital currencies (CBDCs) have gained traction over the last decade, but are they prominent enough to replace good old cold hard cash?

ALSO READ: South Africans warned against picking up money amid wave of CIT heists

Beware of financial exclusion

Speaking to The Citizen, Luno’s country manager Christo de Wit said there must be a high adoption of digital alternatives for a cashless economy to be viable.

De Wit said South Africans were already making online purchases and using contactless payment methods, adding that some retailers had started going cashless.

“Shoprite opened its first cashless store in Durbanville in August,” he said.

“Pick n Pay now allows payment with Bitcoin at the tills, and several other retailers offer crypto payment options, but switching between traditional and crypto payment channels is still cumbersome,” he added.

Despite the developments, De Wit said financial inclusion remained a prominent issue, saying many remained underserved by the current financial system.

De Wit was concerned that the elderly could potentially be excluded from the economy by going cashless. 

“While access has improved, a cashless economy would effectively lock out older citizens of those with no access to digital options,” he said.

Cashless Gauteng, coming soon?

Meanwhile Gauteng Premier, Panyaza Lesufi recently called for a cashless provincial economy.

Responding to the CIT heist on the N12 near Diepkloof, Gauteng last Saturday, Lesufi said having less cash in circulation would eliminate ATM bombings and CIT bombings and robberies.

READ MORE: Robbers blow up CIT van on the N12

“If we remove cash and convert our province into a cashless environment, this madness will be minimised,” Lesufi tweeted.

“The retail industry must heed our call to move towards cashless,” he said.

Seemingly alluding to the province’s capability to make the switch, Lesufi said Gauteng was a highly digital province – adding that even the elderly were tech savvy.

“Even uncles when they ask for money, they say ‘eWallet’ me,” he said.

If we remove cash and convert our province into a cashless environment this madness will be minimised. The retail industry must heed our call to move towards cashless. The hospitality industry especially hotels are cooperating nicely with us. We are a highly digital province.… https://t.co/FiMWomy7QP

— Panyaza Lesufi (@Lesufi) October 7, 2023

Regulatory gaps

When it comes to ticking regulatory boxes, De Wit said crypto was not regulated until last year, when the Financial Sector Conduct Authority (FSCA) declared crypto a financial product.

Earlier this year, the FSCA announced that all crypto asset service providers in SA will need to operate with a license by 1 December 2023 – according to De Wit.

“This is a crucial step in addressing the use of crypto for payments by clearing a path for greater adoption in the mainstream financial system,” said De Wit.

“The move means that existing financial service providers will be more open to banking and working with licensed crypto providers, whereas in the past certain banks were not comfortable to engage in an unregulated sector,” he explained.

ALSO READ: WATCH – Cops launch manhunt after guards wounded, woman hijacked in Joburg CIT heist