Australians have expressed significant apprehension regarding a society that relies solely on digital transactions, despite the fact that they make very few cash payments. Despite the decline in cash payments, Australians are voicing significant apprehensions about the trajectory towards a society with minimal cash transactions. A majority of individuals express worry, with a significant portion of Australians feeling particularly anxious about the potential obsolescence of physical currency.
According to recent research by payments technology company Waave, approximately 63% of Australians express concerns about the potential impact of a particular move on economic inequality. A recent survey revealed that a majority of individuals have expressed concerns regarding potential increases in banking and card fees. Additionally, a significant portion of respondents, 42 percent, have expressed a lack of trust in the ethical practices of financial services in a cashless society.
Even our sentimental attachment to physical currency plays a part in our hesitation to fully embrace a cashless society. A significant 42 percent of people feel they would miss the experience of handling tangible notes and coins. Although this sentiment is most prevalent among Baby Boomers (49%), it is surprisingly significant among Millennials (37%), and even Gen Z (38%).
“Whether you’re younger or older, the psychology around cash is unique,” Waave CEO Ben Zyl said.
“We like the feel of it, the sense of control, and we tend to spend less when we pay in cash.
“It’s up to governments, banks, and retailers to move faster in adopting and promoting the latest technologies to create a cashless system for consumers that is fair, transparent, and user-friendly for everyone.”
Those who are most concerned may have limited experience with technology and face challenges in accessing financial services. The majority of Baby Boomers, regional Australians, and households earning less than $100,000 a year share this sentiment, with percentages ranging from 75% to 82%.
In contrast to older Australians, a significant portion of Gen Z (46 percent) does not express concern about Australia’s transition towards a cashless society. This includes a notable 18 percent of those who are not concerned at all. Australians aged 18 and older participated in the online survey that market research company YouGov conducted in February.
Australia leads the way to cashless society
Angel Zhong, an associate professor of finance at RMIT, predicts that by 2030, consumer preferences will lead to a predominantly cashless society in Australia.
“That means cashless payment will become the dominant way of payment,” she told news.com.au. “But it does not mean that cash as a legal tender will lose value or disappear from society.”
Cash payments are becoming increasingly uncommon in a society that heavily relies on digital transactions, with the majority of payments made without them. Zhong mentioned that Australia is at the forefront of global leadership.
“We have surpassed the US and Europe in the adoption of digital payments,” she said. “We are also the birthplace of large-scale buy-now-pay later services, such as Zip and Afterpay.”
The Reserve Bank of Australia has noted that the COVID pandemic has expedited the decrease in cash usage. In 2022, cash payments accounted for only about 13% of all transactions, as reported by the RBA’s consumer payments survey.
Zhong mentioned that there has been a significant change from 70 percent in 2007.
In a future society where cash is rarely used, the majority of payments will be made electronically, with cash payments becoming increasingly uncommon. Zhong mentioned that Australia is at the forefront on a global scale.
“The use of digital wallet payments on smartphones and watches has soared from $746 million in 2018 to over $93 billion in 2022,” she added.
Zhong explained that individuals who do not rely on cash may still have reservations about transitioning to a cashless society due to concerns about privacy, security vulnerabilities, and reliance on technology.
“They may worry about their transaction data being tracked and analysed by corporations or government agencies,” she said.
“Digital payment systems can sometimes be vulnerable to technology outages, hacking, or fraud.
“People who don’t use cash might still be concerned about the security of their digital transactions and the safety of their financial information.”
She added: “Even though they don’t use cash, people might still be wary of becoming too dependent on digital technology for everyday transactions.
“Concerns about technological glitches, network outages, or power failures could lead to worries about being unable to make payments in the absence of cash.”
The Australian Prudential Regulation Authority reported that the 2022–23 financial year saw the closure of 424 bank branches, 122 of which were located in regional and remote areas. The report highlighted a significant decrease in the number of branches, particularly in regional and remote areas, with a decline of 34% and an overall decline of 37% since June 2017.
Additionally, the removal of over 700 cash machines led to an 11% decrease in the number of ATMs. In recent years, Australia has experienced a significant decline in the number of operational ATMs, resulting in less than 6,000 cash machines remaining throughout the country.
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