South Africa vs. Nigeria: Contrasting approaches to ATM networks and financial inclusion

South Africa’s leading banks, including Standard Bank, Absa, Nedbank, and First National Bank (FNB), are rapidly dismantling their ATM networks and have closed about 8,345 ATMs in the last five years, according to a MyBroadband report.

This aggressive reduction reflects a broader pivot toward digital payments, driven by declining cash usage and high maintenance costs. However, the move raises concerns about financial inclusion for cash-dependent communities, particularly when compared to Nigeria, where ATM networks remain stable despite a surge in digital transactions.

The data reveals the extent of the closures: Standard Bank’s number of ATMs declined by 3,759, Absa cut 3,518, FNB has 1,010 fewer machines, and Nedbank has 58 fewer. This follows a trend of downsizing physical banking infrastructure, with the “Big Four” banks also reducing branch numbers by nine in 2024 compared to 2023. Nedbank, for instance, cut four branches, signalling a strategic shift to digital-first banking. 

According to the World Bank data, South Africa’s ATM network count dropped from 33,171 in 2019 to about 28,967 by 2023, a 2.67% annual decline. At this rate, ATMs could become nearly obsolete within a few decades.

The closures stem from multiple factors. A Visa-Discovery SpendTrend report indicates 84% of South Africans prefer digital payments for transactions above R100, with mobile apps, contactless cards, and point-of-sale (PoS) systems gaining traction. 

Tshiwela Mhlantla, Absa’s Managing Executive for Integrated Channels, explains that reduced cash interactions and evolving customer behaviour prompted the bank to scale back its ATM footprint. Additionally, ATM maintenance is increasingly costly due to security risks, including bombings and skimming, which have plagued South African banks.

Not all banks are retreating, however. Capitec, the country’s fifth-largest bank, added 367 ATMs and 23 branches since 2019, targeting both urban and rural customers who still rely on cash. This divergence underscores a tension in the sector: while digital adoption surges, a significant portion of the population depends on physical cash services.

Implications of declining ATM networks in South Africa

The ATM closures pose significant challenges, particularly for financial inclusion. Rural and low-income communities, where internet access is limited, rely heavily on cash for daily transactions like groceries and transport.

A SANECentre report highlights public frustration over fee hikes, with banks like Capitec and FNB set to raise monthly fees by R45 from July 2025, and ATM transactions potentially costing up to R80. These increases disproportionately burden cash-dependent users.

Cybersecurity risks also loom large as banks push digital adoption. Standard Bank recently warned of sophisticated scams, including phishing and impersonation frauds posing as the South African Reserve Bank.

Deloitte’s 2024 African Financial Industry Barometre flagged cybercrime as a top threat, with 59% of financial institutions citing it as a critical risk. Without a robust digital infrastructure and customer education, the transition could expose vulnerable users to fraud.

Nigeria: A contrasting approach

Nigeria, Africa’s largest economy, offers a stark contrast. While South Africa’s ATM network shrinks, Nigeria’s roughly 21,000 ATMs have remained stable, with slight expansions to support financial inclusion.

The Central Bank of Nigeria (CBN) has prioritised cash access in rural areas, recognising that cash remains essential for millions of unbanked citizens. However, digital transactions are booming, with PoS transaction values soaring 77% to ₦85.9 trillion in the first half of 2024, compared to a 20% drop in ATM transaction values to ₦12.21 trillion, per Intelpoint data.

Nigeria’s approach is shaped by policy. The CBN’s cashless initiatives, including withdrawal fee adjustments and ATM usage limits, incentivise digital channels like PoS agents, which now outnumber ATMs significantly. Yet, the CBN has fined banks ₦1.35 billion for failing to meet ATM cash distribution mandates, ensuring availability. 

South Africa’s ATM decline aligns with a continent-wide shift toward digital banking. Countries like Kenya and Nigeria lead in mobile-first services, with platforms like M-Pesa and USSD banking transforming access. However, ATM growth has stalled across Africa due to high costs and digital preferences. 

Ultimately, South Africa’s banking sector is betting on a digital future, but the transition risks leaving cash-dependent communities behind. Investments in affordable digital access, PoS expansion, and cybersecurity are critical to bridge the gap.

Nigeria’s balanced approach, maintaining ATM networks while promoting digital channels, offers a potential model. Both countries must prioritise consumer protection and inclusion to ensure their financial systems serve all citizens.