The majority of Aussies are worried about the country moving towards a cashless society, as experts say we will become “functionally cashless” by the end of the decade.
As hundreds of bank branches and ATMs close down across the country, new research has revealed 71 per cent of Aussies are concerned about the shift to a cashless society, with 41 per cent admitting they are “extremely concerned”.
Baby Boomers, regional Australians and lower-income households were the most worried about the move, the research from payments technology company Waave found.
Are you worried about Australia going cashless? Contact tamika.seeto@yahooinc.com
Two-thirds of Aussies said they were worried going cashless would exclude certain Aussies and exacerbate economic inequality, while 58 per cent were worried about increased banking and card fees.
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Waave co-founder and CEO Ben Zyl said Aussies were among the highest adopters of digital payments in the world but were “rightly worried” about who was protecting their interests.
“The current digital-payments system has not been built with consumer security or control in mind - people are getting their details stolen, fumbling around with passwords, and paying ridiculous card fees and surcharges,” Zyl said.
“There’s a lot of fear, particularly among those who can’t access alternatives or aren’t confident using technology.”
Nearly half of Aussies said they would experience “cash nostalgia” and miss the feeling of handling cash in hand. This attitude - along with concerns around going cashless more broadly - was higher among Baby Boomers.
“Whether you’re younger or older, the psychology around cash is unique. We like the feel of it, the sense of control, and we tend to spend less when we pay in cash,” Zyl said.
Reserve Bank data shows Aussies made 30.2 million ATM withdrawals in January, the highest number in a year. More than $9 billion was taken out, the biggest sum since mid-2020.
Australia to be ‘cashless’ by 2030
RMIT associate professor of finance Dr Angel Zhong recently told Yahoo Financeshe expected Australia would become “functionally cashless” by 2030, as more consumers move to digital-payment options over cash. But this doesn’t mean cash will be gone completely.
“I’m not saying that we won’t see cash at all and I’m not saying that cash will lose its value,” Zhong said.
“It’s more about how digital payments are becoming the mainstream payments for consumers. The transition is well underway.”
The share of consumer payments using cash dropped from 70 per cent in 2007 to just 13 per cent in 2022, according to the RBA.
A total of 424 bank branches - or 11 per cent of Australia’s overall branches - closed in the 12 months to June 2023, Australian Prudential Regulation Authority data found. A further 718 ATMs were closed or removed.
The Big Four banks - Commonwealth, Westpac, ANZ and NAB - have all ruled out going cashless.
She estimates that Australia will enter into a cashless society by 2030, slightly later than Commonwealth Bank's prediction of 2026, and argues for government regulation of digital payment services to help navigate the transition.
Westpac, ANZ, CommBank and NAB have ruled out going cashless, but the banks have shuttered branches across regional Australia, leaving some customers without the option to bank with cash.
The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more. Credit and debit cards, electronic payment apps, mobile payment services, and virtual currencies in use today could pave the way to a fully cashless society.
Physical currency isn't becoming obsolete any time soon, so it's important to weigh up your options before deciding to go fully cashless in 2024. Ensuring you can accept some cashless payments though, is essential to keeping with today's trends and customer expectations.
RMIT associate professor of finance Dr Angel Zhong recently told Yahoo Finance she expected Australia would become “functionally cashless” by 2030, as more consumers move to digital-payment options over cash. But this doesn't mean cash will be gone completely.
Why Eliminate Cash? Cash can be used in criminal activities such as money laundering and tax evasion because it is difficult to trace. Digital transactions or electronic money create an audit trail for law enforcement and financial institutions and can aid governments in economic policymaking.
Londoners are moving away from cash faster than the rest of the country, according to new data. Figures from Link, the firm behind the majority of the UK's cash machine network, shows the capital's residents and workers are taking out £500m less every month from machines compared to pre-pandemic levels.
The US is moving toward cashless payments, with a substantial increase in the use of mobile wallet apps and contactless cards. A report from the Federal Reserve Bank of San Francisco found that payments made using cash accounted for just 18% of all US payments in 2022.
Cashless or tellerless bank branches have proliferated in several countries in recent years. In a cashless bank branch, teller or counter services such as cash withdrawals, deposits and cheque-cashing are not available. These services are instead provided via automatic teller machines.
Nope. We might use less cash, but our society still has a long way to go before it's totally and completely cashless. And just because some stores didn't want to accept dollar bills for a while (and maybe still don't), that doesn't mean a cashless society is here to stay.
When you have cash in hand, you know it's safe from everything except direct robbery or physical destruction. But when your money is in digital form, it's vulnerable to hackers and system malfunctions.
As people move toward more electronic or digital forms of payment, it might seem like paper money is on its way toward obsolescence. But experts say that cash will always be around.
One widely quoted report predicts that the global transition from cash to digital will reach a tipping-point in 2025, and the pandemic, in which contactless payments surged, has only exacerbated this trend.
Elderly people may be less comfortable with tech and less able to make the switch from physical currency. Rural communities could also be left vulnerable, because of poor broadband and mobile connectivity. People with low income or debt tend to find cash easier to manage too.
“Elderly Chinese still often prefer to pay with cash and some struggle with using mobile payments.” Less than a year ago, state media was lauding China's trajectory towards becoming the world's top country for cashless transactions. Xinhua reported cash had dropped to just 3.7% of the total money in circulation.
Looking further ahead, bankers expect the Australian dollar to continue to appreciate against the US dollar: Westpac predicts that the Aussie's value will increase to 0.72c by June 2025. NAB puts the AUD/USD at 0.75c by June '25. ING thinks the Australian dollar will remain at US$0.66 until mid-2025.
The majority of places in Australia will accept Mastercard and Visa card payments, with many also accepting American Express, so you won't need to take a huge amount of cash with you on your travels.
As at the 20th of May, the ASX 30 Day Interbank Cash Rate Futures June 2024 contract was trading at 95.69, indicating a 10% expectation of an interest rate decrease to 4.10% at the next RBA Board meeting.
1.1 This Bill introduces offences for entities that make or accept cash payments of $10,000 or more. 1.2 This ensures that entities cannot make large payments in cash so as to avoid creating records of the payment and facilitating their participation in the black economy and undertaking related illicit activities.
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