From cash box to card reader: How digital payments can support South Africa’s small businesses
Updated: Aug 4
Walk through a township market or suburban strip mall in South Africa and the shift is visible: QR codes on shop windows, mobile card readers at market stalls and digital payment confirmations replacing the exchange of notes.
For small-business owners, this shift is not only about convenience. Digital payments can create transaction records, widen the ways customers can pay and help businesses participate more fully in the formal and digital economy.
Cash has costs that are easy to overlook
FinMark Trust’s FinScope MSME South Africa 2024 survey estimates that South Africa has approximately 3 million micro, small and medium entrepreneurs, employing around 13.4 million people and generating turnover of more than R5 trillion. The same survey describes the MSME ecosystem as largely cash-driven and reports that 72% of the approximately 2.5 million micro-enterprises operate informally.
Cash can appear inexpensive, but it brings costs and risks, including theft, cash-handling time and manual reconciliation. It also provides a limited digital record of trading activity. This can make it harder for a business to demonstrate turnover, establish consistent trading patterns or support an application for finance.
The World Bank’s Global Findex 2025 database, based on surveys conducted in 2024, reports that 65.1% of South African adults aged 15 and older made or received a digital payment during 2024. As more consumers use digital channels, businesses that accept only cash may be less able to serve customers who prefer electronic payment options.
“A digital payment is more than a transaction: over time, it can become part of a business’s verifiable trading record.”
What going digital can provide
Each digital transaction creates data. Over time, transaction records may help a business demonstrate turnover patterns, seasonality and trading consistency. For informal and micro businesses without comprehensive financial statements, this information may become a useful input into a lender’s assessment, alongside affordability, creditworthiness and other relevant factors.
This is not an automatic path to credit. Digital payment acceptance does not guarantee financing or business growth. It can, however, improve the quality of information available to the business and to finance providers.
Payfast by Network’s State of Pay 2025 report, which draws on surveys of its merchants and consumers, reported that the use of buy-now-pay-later options doubled between 2024 and 2025 and that nearly one-third of surveyed consumers had used the Mobicred credit facility. These findings are specific to the Payfast survey population, but they illustrate the wider range of payment choices that digitally enabled merchants may be able to offer.
Addressing the cost and access challenge
Cost remains a material concern for small merchants. Transaction fees, devices, connectivity and operational requirements can place pressure on thin margins.
Fintech payment providers have contributed to broader access by offering alternative acceptance solutions, simplified onboarding and products designed for smaller merchants. Increased competition can improve choice, encourage innovation and place downward pressure on barriers to entry. These outcomes are not automatic, and they depend on fair access, effective infrastructure and proportionate regulation.
Inclusion requires interoperability
The South African Reserve Bank’s National Payment System Framework and Strategy: Vision 2025 identifies financial inclusion, competition and innovation, cost-effectiveness and interoperability among the goals for the national payment system. The SARB has subsequently continued this modernisation work through its Payments Ecosystem Modernisation Programme.
Interoperability matters because it enables payment services to work across institutions and platforms. When implemented effectively, it can reduce friction, broaden customer choice and support competition among banks, fintechs and other payment providers.
PayShap, launched in 2023, is a low-value, real-time payment service intended to deepen digital financial inclusion for consumers and small businesses. The SARB described it as an industry-led initiative and an important step towards greater interoperability and payment-system modernisation.
Financial inclusion in payments is therefore not achieved by digitisation alone. It also requires secure infrastructure, fair access, effective competition, consumer trust and products that are genuinely usable and affordable for smaller businesses.
Why this matters for public policy
A more inclusive payment ecosystem can benefit individual businesses and the wider economy. When smaller merchants can accept digital payments on workable terms, they may serve more customers, create better trading records and participate more fully in digital commerce.
The policy challenge is to expand access and competition while maintaining appropriate safeguards for consumers, merchants and the national payment system. Collaboration among regulators, banks, fintech payment providers and other industry participants will be central to achieving that balance.
The opportunity ahead
South Africa has a substantial and diverse MSME sector, while consumer use of digital payments continues to grow. The opportunity is to ensure that the payment ecosystem develops in a way that also works for informal businesses, micro-merchants and smaller enterprises.
A trader who begins accepting digital payments may create a clearer record of business activity. A merchant offering card, QR or instant-payment options may be able to serve customers who carry less cash. A home-based business using digital payment and commerce tools may reach customers beyond its immediate area.
Digital payments are not a complete solution to the challenges facing small businesses. Used within an inclusive, competitive and interoperable ecosystem, however, they can provide practical tools that support participation, resilience and growth.
Key Takeaways
FinScope MSME South Africa 2024 estimates that approximately 3 million MSME entrepreneurs employ around 13.4 million people and generate turnover exceeding R5 trillion; the ecosystem remains largely cash-driven.
Digital transaction records may help businesses demonstrate trading activity, but they do not guarantee access to credit or business growth.
The World Bank reports that 65.1% of South African adults aged 15 and older made or received a digital payment in 2024.
Competition from fintech providers can broaden access and improve choice, provided that infrastructure access and regulation support effective participation.
Interoperability, cost-effectiveness, financial inclusion and competition are established goals of South Africa’s national payment-system strategy.
Selected References
FinMark Trust, FinScope MSME South Africa 2024: Key findings highlight urgent need for informal sector support (16 September 2024).
World Bank, Global Findex Database 2025: South Africa indicator, “Made or received a digital payment (% age 15+)”, based on 2024 survey data.
Payfast by Network, The State of Pay in 2025 (published January 2026).
South African Reserve Bank, National Payment System Framework and Strategy: Vision 2025.
South African Reserve Bank, Media Statement: South Africa clears the way for broader financial inclusion with the launch of a low-value, real-time digital payment service (13 March 2023).
South African Reserve Bank, Payments Ecosystem Modernisation Programme.
Note: This article is intended as general thought leadership and does not constitute legal, regulatory, financial or credit advice.
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