South Africa’s dependence on cash is unlikely to end until the country addresses gaps in digital identity, outgoing Nedbank Chief Operating Officer, Mfundo Nkuhlu, has said.
Nkuhlu made the remarks on Tuesday at the Nedbank Payments Summit in Sandton, arguing that a functional national digital ID system is critical to bringing unbanked South Africans into the formal financial system.
“The key requirement will be the advent of digital ID,” Nkuhlu said. “Digital ID will be the basis to solve the unbanked population. As long as they remain unbanked, the cash economy will remain.”
According to him, the major challenge is not a lack of technology but coordination between the government and private sector.
“We often struggle to cross the gap between government and the private sector,” he said, adding that digital identity could help bridge the divide.
South Africa’s Department of Home Affairs has set a target of completing the infrastructure for a national digital identity platform by March 31, 2027. Citizens are expected to receive digital credentials through a secure mobile wallet during the 2027/2028 financial year.
However, identity specialists have raised concerns about aspects of the proposed system, including the use of two-dimensional selfies for liveness checks, which they say could be more vulnerable to spoofing than depth-sensing technologies.
Nkuhlu said the objective should not necessarily be to eliminate cash completely but to reduce its use gradually.
“We’ve heard that cash will not disappear for decades. It might not disappear completely, but we’d like to see cash decline gradually, like it has in India and Brazil,” he said.
He pointed to Brazil’s Pix and India’s Unified Payments Interface as examples of state-backed instant payment systems that have helped expand digital payments by offering consumers free or low-cost transactions.
Nkuhlu said the shift away from cash is part of a broader transformation in the payments industry, with instant, programmable and increasingly automated transactions becoming more common.
“Digital payment is far more than a convenient alternative to cash or cards. It is becoming increasingly intelligent and invisible,” he said.
He added that trust, regulation and interoperability would determine which payment technologies and companies succeed as the sector evolves.
Nkuhlu also discussed the growing role of stablecoins, saying they could facilitate faster international transfers through blockchain technology without necessarily replacing traditional banks.
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He identified tokenised bank deposits and central bank digital currencies as potentially more significant developments for the future of the financial system.
Nkuhlu further raised concerns about the emergence of artificial intelligence agents capable of initiating payments without direct human intervention.
“We are also starting to see AI agents paying by themselves. The shift is from people initiating payments to software initiating payments, through the emerging agentic economy,” he said.
He warned that such systems could create new risks if AI agents make payment decisions with limited human oversight.
“These are major questions that will need to be settled for the integrity of the future financial system itself,” he said.
Nkuhlu, who has spent more than 22 years at Nedbank, is due to take early retirement at the end of December. The bank is discontinuing the COO position and will distribute his responsibilities among members of its executive committee.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
