South African Banks Slash Over 8,000 ATMs in Five Years Amid Digital Banking Push—But at What Cost?

June 24, 2025

South Africa’s largest banks are aggressively scaling back their ATM networks in a sweeping shift toward digital banking. According to a recent MyBroadband report, over 8,345 ATMs have been decommissioned across the country in the past five years, driven by evolving consumer preferences, high maintenance costs, and a broader move toward digital financial services.

The downsizing has involved major players like Standard Bank, Absa, Nedbank, and First National Bank (FNB)—collectively known as the country’s “Big Four” banks. Standard Bank has slashed 3,759 ATMs, Absa followed with 3,518 closures, FNB has removed 1,010 machines, and Nedbank has scaled back slightly with 58 fewer ATMs.

While this shift aligns with a global trend toward digital finance, it raises important questions about financial inclusion and access for cash-reliant communities, particularly when compared with Nigeria—a country that has maintained a more balanced strategy.

📉 Declining ATM Numbers Reflect Digital Shift

South Africa’s ATM network fell from 33,171 in 2019 to 28,967 in 2023, according to World Bank data—a 2.67% annual decline. At this pace, ATMs could become nearly obsolete in the coming decades.

This trend is reinforced by data from a Visa-Discovery SpendTrend report, which shows that 84% of South Africans prefer digital payments for transactions exceeding R100. Contactless payments, mobile apps, and Point-of-Sale (PoS) systems are increasingly replacing traditional cash withdrawals.

Tshiwela Mhlantla, Absa’s Managing Executive for Integrated Channels, noted that reduced customer interaction with cash and high ATM maintenance costs—especially amid rising security threats such as bombings and skimming—have pushed banks toward digital-only services.

💰 Capitec Bucks the Trend

While most banks are closing ATMs, Capitec Bank has taken a contrarian approach, adding 367 ATMs and 23 branches since 2019. The bank’s strategy targets underserved urban and rural areas, recognizing that millions of South Africans still rely on cash for daily needs like transport and groceries.

This divergence illustrates a sector in flux: While urban consumers and the middle class gravitate toward digital solutions, millions on the economic margins remain excluded.

⚠️ Financial Exclusion and Rising Costs

The closure of physical banking infrastructure could significantly hinder financial access for rural and low-income populations, where internet connectivity is patchy and smartphones are not always affordable.

A report by the South African National Economic Centre (SANECentre) warned that the downsizing of ATM networks could lead to increased reliance on costly informal financial services.

To compound matters, banks like FNB and Capitec plan to hike monthly account fees by R45 from July 2025, with ATM transaction charges potentially reaching R80 per withdrawal—a heavy burden on low-income, cash-dependent users.

🛡️ Cybersecurity Risks in a Digital Future

As digital transactions rise, so do the threats. Banks like Standard Bank have issued warnings about sophisticated cyber scams, including phishing and impersonation schemes involving fake Reserve Bank officials.

A Deloitte 2024 African Financial Industry Barometre report noted that 59% of financial institutions across Africa now consider cybercrime their top operational risk.

Without robust digital infrastructure and consumer education, rushing the transition could expose vulnerable users to fraud and financial loss.

🇳🇬 Nigeria: A Model of Digital-Cash Balance

In stark contrast, Nigeria’s ATM network has remained stable, with around 21,000 ATMs still operational despite a dramatic surge in digital transactions.

While PoS transaction values in Nigeria grew 77% to ₦85.9 trillion in H1 2024, ATM withdrawals dropped 20% to ₦12.21 trillion, according to Intelpoint. Yet, the Central Bank of Nigeria (CBN) continues to prioritize rural cash access, enforcing penalties on banks that fail to stock ATMs adequately.

CBN’s cashless initiatives, which include fee adjustments and ATM usage limits, aim to steer customers toward PoS agents (which now outnumber ATMs), without removing critical access to cash.

🌍 The Road Ahead: Balancing Innovation and Inclusion

South Africa’s path mirrors a broader continent-wide pivot to digital finance, with countries like Kenya and Nigeria leading mobile-first banking revolutions through platforms like M-Pesa and USSD banking.

However, experts caution that without investments in affordable internet, PoS access, cybersecurity, and digital literacy, many South Africans may be left behind in the race toward a cashless economy.

Nigeria’s hybrid model, which retains ATM access while driving digital innovation, could serve as a template for balancing innovation with inclusion.

As Africa’s financial sector evolves, the true measure of progress will not be how fast banks go digital, but how well they serve all citizens—rich or poor, connected or unconnected