Cash use in electronic age waning
A banking expert says notes and coins are holding on in the electronic age – stashed under mattresses and in sock drawers.
Claire Matthews, of Massey University, says while cash as a means of payment has been overtaken by electronic payment it is still being used as an asset and in certain sectors.
‘‘We’ve seen over the last 20 years a strong movement into electronic payment because it is so convenient and there is no cost to the consumer.’’
Statistics from electronic payment provider Paymark showed 68 per cent of retail spending was done using electronic cards, up from 56 per cent in 2003.
Matthews said while the proportion of cash transactions had declined in the last 20 years, the total amount of cash on issue was increasing year on year. As of March 2018, according the Reserve Bank, there was about $6.11 billion in circulation compared with $1.63b in 1998.
A Reserve Bank spokesman said despite the amount of cash in circulation rising, New Zealand had one of the lowest levels of cash in circulation per capita in the Organisation for Economic Co-operation and Development (OECD). ‘‘This is widely credited to the early and widespread adoption of electronic payments, starting with Eftpos.’’
A large proportion of cash in circulation was in $50 and $100 notes. Matthews said this might be explained by people storing money outside of banks.
Cash – particularly larger denominations – was also likely popular in the criminal economy.
‘‘There’s a large number of those notes on issue and anecdotally it would appear the criminal sector might be where they are being used.’’
Matthews said buskers and charity collectors on the street were still mainly reliant on cash.
Paymark’s head of e-commerce, digital experience and marketing, Darren Hopper, said the cash economy was also being buoyed by cash jobs and undeclared income. In retail, it was still reasonably common in dayto-day spending.
An ANZ spokeswoman said the number of ATM transactions had declined 21 per cent over the last six years, though the average withdrawal value had increased.
The Reserve Bank’s 2017 Cash In New Zealand survey found 96 per cent of Kiwis used cash and at least 80 per cent carried it on them.
Hopper expected to see electronic payment increasingly replace cash in New Zealand.
Mobile payments were rising – over 40 per cent of e-commerce was completed on a mobile device, while QR codes and facial recognition were tipped to become more prevalent.