The city centre was brought to a standstill as traffic was diverted and people barred from the vicinity where robbers stormed into Cash Crusaders on the corner of Long and Strand streets.
A tweet from an onlooker appeared to show one of the hostage-takers being arrested. Police spokeswoman Sergeant Noloyiso Rwexana said that she would provide full details soon.
It was unclear how many people were being held hostage. A witness said some hostages had been freed while others remained inside.
Sheldon Cameron tweeted: “Avoid Strand Street in Cape Town‚ there is currently a robbery and hostage situation underway at Cash Crusaders”
Tina tweeted: “Word is Cash Crusaders‚#StrandStreet #CapeTown..Police telling robbers to come out with hands up.#CrimeMustFall”
Nthabi Selemale tweeted: “If u in Cape Town CBD travel with caution in Strand Street. Robbery in progress at Cash Crusaders with reports of hostage stand off”
Jolandi tweeted: “All’s well that ends well! Well done to the #sapd and #adt! #cashcrusaders #holdup #capetown”