South Africa will not shake its dependence on cash until it fixes identity, outgoing Nedbank chief operating officer Mfundo Nkuhlu said on Tuesday, arguing that a working national digital ID is the precondition for pulling the country’s unbanked into the formal payments system.
“The key requirement will be the advent of digital ID,” Nkuhlu told the Nedbank Payments Summit in Sandton. “Digital ID will be the basis to solve the unbanked population. As long as they remain unbanked, the cash economy will remain.”
The obstacle, he said, is not technology but coordination. “We often struggle to cross the gap between government and the private sector.” A digital identity, he said, could bridge it.
Home affairs minister Leon Schreiber’s department has set a target of completing the hosting infrastructure for a national digital identity platform by 31 March 2027, with citizens issued digital credentials through a secure mobile wallet in the 2027/2028 financial year. Identity specialists have flagged gaps in the draft rules, among them a reliance on 2D selfies for liveness checks, which are easier to defeat with a photograph or a screen than the depth-sensing alternatives.
Nkuhlu said the aim is a gradual decline in cash rather than its abolition. “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. “They have shown the intent and will to go digital for the majority of the population. We are in that same position.”
Both countries got there through state-backed instant payment systems that are free or near-free for consumers – Brazil’s Pix, built by its central bank, and India’s UPI.
‘A new payments paradigm’
Nkuhlu said the complexity of weaning an economy off notes and coins is why the regulator has entertained the idea of a cash utility housed in PayInc, the payments infrastructure company formerly known as BankservAfrica, in which the Reserve Bank now holds a 50% stake. Nedbank is a participant in the central bank’s Payments Ecosystem Modernisation programme, which is building the guardrails for low-value digital payments including PayShap.
Nkuhlu’s inclusion argument sat inside a broader claim: that the structure of payments has changed, and that South African banks are running out of time to adapt.
“Payments are the bloodline of society,” he said. “Digital payment is far more than a convenient alternative to cash or cards. It is becoming increasingly intelligent and invisible.”
Instant payments are becoming the default. Transactions are increasingly programmable, triggered automatically by events, and increasingly intelligent, gathering and analysing data as they go. “The future is instant, programmable, intelligent and increasingly invisible payments,” he said. “Trust and regulation and interoperability will determine which technologies, and companies, will scale.”
On crypto, he said stablecoins “will also have a role to play, but not necessarily to replace banks”. They were “designed to circumvent regulatory routes of banks, but they have become mainstream and will enable fast global transfers using blockchain”.
Trust, he added, remains the sticking point. The more consequential direction, in his view, is tokenised deposits and central bank digital currencies rather than simply replacing traditional money with crypto.
“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. “This is exciting, but we have also seen agents going rogue. Agents are increasingly able to initiate payment activity with limited human control, which is a significant new risk to manage.”
‘Major questions’
Trust, he argued, is the real battleground here as well: who authorises a payment, who carries the cost of an agent’s mistake, who protects the consumer and how privacy survives financial crime controls. “These are major questions that will need to be settled for the integrity of the future financial system itself.”
Nkuhlu takes early retirement at the end of December after more than 22 years at Nedbank. The group is discontinuing the COO role and redistributing his responsibilities across its executive committee. – (c) 2026 NewsCentral Media
