Cards and digital payments are in, cash is out. That’s the major takeaway from newly released research from MyState Bank which found that two in three Australians (68%) have been using less cash since the COVID-19 outbreak began.
With hygiene high on everyone's minds, Australians have instead been favouring contactless payments via debit card or credit cards, as well as mobile payment options such as Apple and Google Pay.
Cash withdrawals have also decreased, with data from MyState Bank’s network of ATMs revealing a 32% reduction in withdrawals over the past year, a trend which the bank says has only accelerated since the outbreak.
“The rise of online shopping, digital wallets and the whole convenience of digital payment methods has pushed many consumers to reduce or even eliminate cash from their lives,” said MyState Bank chief executive, Melos Sulicich.
“The speed at which Australia is moving towards a ‘less cash’ or even cashless society is also clearly being accelerated by the COVID-19 pandemic.”
This is not likely to be a trend which evaporates after the pandemic either.
As part of their research, MyState Bank found that 67% of Australians who reported using less cash during COVID-19 also expect to continue to favour contactless payments over cash in the future.
Total cashlessness a bridge too far
The decline of cash use in Australia is nothing new. In fact, the Reserve Bank of Australia (RBA) has recorded a significant decrease over the past decade in both the number of in-person cash payments and the value of those payments.
The RBA’s latest Consumer Payments Survey, which was released in June, showed that the proportion of in-person cash payments made in Australia has dropped from roughly 75% in 2007 to around 30% in 2019.
Perhaps unsurprisingly, this trend is being fuelled by younger Australians.
Between 50% and 75% of people in the 18-29, 30-39 and 40-49 age cohorts were found to be ‘low cash users’ by the RBA, while that figure dropped to just 25% for people aged 65 and above.
So while Aussies are certainly trading their notes and coins for cards and phones in ever growing numbers, would they be happy to transition to a completely cashless society?
According to MyState Bank’s research, the answer is no.
MyState found that as many as seven in ten people were not in favour of a completely cashless society, with the extra merchant fees involved with cashless payments and the potential for network outages raised as major sticking points.
“Our research indicates that, as a nation, we are not ready for cash to be banished completely. It is important for banks to support those who may struggle with the transition to a predominantly digital model as not all Australians have the means to eliminate cash,” said Sulicich.
“There are people in our society who would struggle in a cashless society such as the elderly, the homeless population and those with disabilities.”
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