Virus brings cashless society a step closer

Australian banks have continued to send proactive messages in the aftermath of the bushfire crisis and during the Covid-19 pandemic. It’s something I wrote about in this column in the April issue.

There have been more developments since. One that caught my attention was the regulator, ASIC, fast-tracking approval for banks to issue more than 500,000 Mastercard or Visa debit cards to customers who didn’t have them.

The move attempts to assist people with a passbook or transaction account so they can shop online or over the phone rather than using cash or EFTPOS. It’s mainly targeted at those aged 70 and over.

This is sensible when you consider federal government advice suggests people 70 and over should stay at home. It’s also useful at a time when some retailers aren’t accepting cash.

Of the 500,000 new cardholders, I do wonder how many have active internet connections for shopping online. Or how many would be confident enough to activate and trust their new digital banking tool.

In 2019, Telstra and Roy Morgan-supported research told us that (for the first time) the gap is narrowing between the most “digitally included” Australians (25- to 34-year-olds) and those aged over 65. And if my grandparents are any indication, older Aussies are definitely becoming more tech savvy.

So what I’d love to know six months from now, or when the shutdowns end, is how many customers used their new card. It would indicate where Australia is at when it comes to digital banking. Will Covid-19 allow us to finally make that giant leap to a cashless society? Possibly.

Another issue caught my eye in early May. The Australian Banking Association (ABA) said more than 429,000 homeowners and 205,787 business owners had received a deferral on their loan repayments. And a further 37,000 repayments (personal loans and credit cards) have been deferred. All up about $6.8 billion in repayments have been halted, with more to come.

The ABA also said Australians have been given another $45 billion in new loans and $6 billion through increases to existing loans and credit facilities.

This obviously eases the financial pressure on many people and it is heartening to know that we’re prepared to ask for help with our money problems before they get out of control. Darren Snyder

Has our new way of working from home changed the real estate investing landscape as offices are less in demand? The coronavirus has profoundly changed the way people work and travel, most notably those who are now working from home and are likely to continue doing so for some time, either on a full- or part-time basis.

The commercial property market will obviously be impacted, but how much depends on how long the necessary health guidelines need to remain in place, how willing employees will be to return to an office as guidelines are relaxed and how employers respond to the needs and wants of these employees.

Other sectors are likely to be impacted too. Valuers are reporting falling values and transaction numbers in the residential market across the country, and financial hardship caused by the coronavirus is likely to put downward pressure on rental returns.

However, industrial properties such as warehouses may fare quite well, as long as they remain tenanted.

Amelia Hodge, chief executive, Australian Property Institute