Why we’re cashing out

The pandemic has only accelerated our move to using cards when spending, writes Sophie Elsworth

CASH usage in Australia is falling as consumers admit the COVID-19 pandemic has forced them to use card payments.

Fears over the spread of coronavirus by using notes and coins have prompted both businesses and consumers to rely on debit and credit cards, as well as other payment methods, such as smartwatches and payment rings.

New research from accounting software firm MYOB has found almost three in five Australians will use less cash than before when the pandemic ends, and similar numbers say local shops only take contactless payments.

The Australian Payments Network’s chief executive officer, Andy White, said consumers had continued to choose “cards over cash for some years now”.

“Retailers are encouraging customers to use contactless (payments) during this period, and some who might have previously used cash are now also paying by card or digital wallet,” he said. “This behaviour is likely to continue after the pandemic.”

The Reserve Bank of Australia’s assistant governor, Michele Bullock, said last week there had been a “sharp and sudden” shift to contactless payments during the pandemic but some people still remained reliant on cash.

“There is still a significant minority of the population that continue to use cash for face-toface payments,” she said.

Ms Bullock also said recent RBA consumer research showed, “cash users tended to be older or people on lower incomes”.

ATM withdrawals in

April fell 30 per cent from the month before.

The Reserve Bank’s latest Consumer Payment Behaviour in Australia bulletin found Aussies are holding less cash in their purses and wallets.

In 2019 the median value of cash held was $45, compared with $55 in 2013.

The report also showed that in 2019, a quarter of people held no cash at all, climbing from 8 per cent in 2013.

In April, in the midst of the pandemic changes, some banks altered contactless tap-and-go limits from $100 to $200 as a temporary measure to reduce the need to touch a payment terminal’s PIN pad and spread germs. The decision is being reviewed later this month.

University of NSW economics professor Richard Holden said, within a few years Australia could become cashless.

“It’s better for businesses because they don’t have all the cash-handling problems and it’s really just a question of whether it is going to be given a nudge by the Reserve Bank,” he said.

“We could end up like Sweden, where they have nearly all their transactions as cashless but they haven’t gone all the way.” Prof Holden said this could be done by having a digital Aussie dollar or, ultimately, phasing out cash.