Path to a cash­less so­ci­ety ac­cel­er­at­ing

The Free Press (Corowa) - - FRONT PAGE - BY JARRYD BARCA

As more and more small busi­nesses join the EFTPOS band­wagon with cash pay­ments be­com­ing a thing of the past, the threat of a cash­less so­ci­ety creeps closer and closer.

One of the most com­mon ques­tions we get asked at the check­outs is ‘cash or card?’, but with the nat­u­ral evo­lu­tion of tech­nol­ogy – think self-serve at your lo­cal su­per­mar­ket – fu­ture gen­er­a­tions may never know what cash was.

The ease and se­cu­rity of sim­ply wav­ing a card, your phone or even your new fancy watch in­stead of car­ry­ing around loose cash is in­creas­ingly pop­u­lar.

Paul Sch­nelle, an ac­coun­tant from Corowa’s Potts and Sch­nelle, ad­mit­ted we are be­com­ing more and more a cash­less so­ci­ety.

“I think that we are (be­com­ing a cash­less so­ci­ety). The use of tap and go pay­ment sys­tems make it very easy to use cards for all pur­poses, in­clud­ing small trans­ac­tions,” he told The Free Press.

“EFTPOS en­ables busi­nesses to get paid up front which is great for cash flow and con­sumers are be­com­ing more ac­cept­ing of pay­ing a trans­ac­tion fee for the use of the card.”

Mr Sch­nelle said that pay­ing by card and elec­tronic trans­fer pro­vides peo­ple with a record of the ex­penses which can be eas­ily sum­marised and com­pared to your bud­get, which can then form the ba­sis of your next bud­get.

“Pay­ing by cash means that you need to sep­a­rately record the ex­penses which comes with the risk that you may miss record­ing some­thing,” he said.

“Pur­chas­ing with a card means that the con­sumer doesn’t have to carry large amounts of cash with the risk of los­ing it or theft.

“If they have a re­wards pro­gram linked to their card, they can ac­cu­mu­late points and then re­deem them later on for ben­e­fits.

“Us­ing the card (also) pro­vides proof of pur­chase if there is a dis­pute about the goods later on.”

But while there are many pros that co­in­cide with so­ci­ety’s cur­rent thirst for easy pay­ment meth­ods, the cons are some­thing to be mind­ful of.

“Pay­ing by credit card can re­sult in some­one over­spend­ing be­cause they can sim­ply ‘book it up on the card’ even if they don’t cur­rently have the funds to pay for it,” Mr Sch­nelle said.

“Re­strict­ing the card limit is a good idea to stop this, or else use a debit card where you have to have the money in the ac­count be­fore you can use it.”

More and more small busi­nesses have made the switch to EFTPOS, ‘cash only’ stores are a rar­ity these days.

“EFTPOS ma­chines make it easy for peo­ple to pay you. The eas­ier it is do deal with you, the hap­pier the cus­tomer and the more likely you can make the sale,” Mr Sch­nelle said.

“Hav­ing an EFTPOS ma­chine can mean that you can get paid straight away in­stead of is­su­ing ac­counts and chas­ing up af­ter months end to get pay­ment.”

Mr Sch­nelle listed some rea­sons as to why some busi­nesses still opt with a cash only sys­tem, say­ing EFTPOS fa­cil­i­ties come with a cost which is dif­fi­cult to then pass on to the con­sumer.

“This is the case es­pe­cially for small value trans­ac­tions which can make cash only a pre­ferred op­tion,” he said.

“Un­for­tu­nately, there is of­ten a pre­sump­tion that cash only stores are po­ten­tially try­ing to cheat the tax sys­tem by not dis­clos­ing all of their sales. This is not al­ways the rea­son to be cash only.”

Guy Street Café co-owner Julie Bartlett, who has been us­ing an EFTPOS ma­chine for 12 years at her pop­u­lar Corowa store, said while there are mer­chant fees and ter­mi­nal costs that come with EFTPOS ma­chines, the ben­e­fits for the cus­tomers means busi­nesses now have “no op­tion”.

“Tap and go def­i­nitely speeds up the pay­ment process (and) many cus­tomers still pre­fer to in­sert their card so the amount is not pend­ing in their ac­count,” she told The Free Press.

“As EFTPOS us­age con­tin­ues to in­crease, so do our mer­chant fees. EFTPOS is some­thing that cus­tomers ex­pect now so there re­ally is no op­tion any­more as to whether to have it or not.”

Re­search by Col­mar Brun­ton, com­mis­sioned for the Aus­tralian Tax­a­tion Of­fice (ATO), re­veals that only one in five Aus­tralians pre­fer us­ing cash for pur­chases.

Ac­cord­ing to the re­port, cash is only the pre­ferred pay­ment method for trans­ac­tions un­der $5 and, for any­thing over $50, the ma­jor­ity want the ease and se­cu­rity of an elec­tronic pay­ment.

The re­search in­di­cates that the cur­rent trend of keep­ing cash at bay will only con­tinue to gather mo­men­tum and 60 per cent of Aus­tralians ad­mit­ted to car­ry­ing lit­tle or no cash at all.

Ms Bartlett said that one of the big­gest changes she has no­ticed is the amount of younger peo­ple us­ing EFTPOS for pur­chases both be­fore and af­ter school.

“It will be in­ter­est­ing to see in the next 1020 years how this changes so­ci­ety. Chil­dren are grow­ing up cash­less and are not learn­ing the ba­sics of money that they can see,” she said.

Guy Street Café used to have a 50-cent sur­charge for any EFTPOS trans­ac­tions un­der $10, but the ACCC (Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion) last year banned sur­charges for any amount other than what the busi­ness was be­ing charged.

Ms Bartlett said she will be look­ing at in­clud­ing EFTPOS fee charges in their next price in­crease to help keep the busi­ness sus­tain­able.

Ap­prox­i­mately 57 per cent of the pop­u­la­tion uses less cash than they did five years ago.

Cash or card? While first in­tro­duced for larger pay­ments, con­sumers now pre­fer to use EFTPOS even when pur­chas­ing some­thing as small as a morn­ing coffee.

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