Cashless Society

Joe Baronio, BTN Reporter: When was the last time you saw something like this? Unless you've received a birthday card from grandma recently, it may have been a while, and that's because Australia has been rapidly ditching physical cash in favour of technology. That's not real money, by the way. Has anyone got a fire extinguisher? Hang on. 

Person: No, I don’t have any cash at the moment. 

Person: Nah, no cash. I don’t carry cash. 

Person: Yes, just coins.  

Person: I do not.  

Person: No.  

Person: Coins.  

Person: No.  

Person: I don’t really use cash ever, really. I’ve got it on my card, so yeah, it’s just an emergency sort of thing.  

When was the last time you used cash? 

Person: It’s actually been a while. I think, genuinely since primary school. In high school it’s been all digital. All card.  

Person: Tuesday.  

According to the Reserve Bank of Australia, cash accounted for just 13 percent of all payments made in 2022, and more than a billion dollars’ worth of physical currency has disappeared from circulation in the last financial year. In fact, this is the first time in the Australian dollar's history that the amount of cash has declined. So, why is it happening? 

Well, it's not because people are setting fire to it. For many, it's convenience.  

Person: Well, I have a card on my phone, and it’s just activated on there so.  

Person: I definitely use card, but I will use Afterpay when I order a big order from like Shien or something. 

Person: You’re not allowed to use your phone at school, so the card’s more helpful with that, yeah.  

Person: Card.  

Person: Yeah, all my cards are on my phone.  

Yep. 

Person: Yeah, same.  

Person: I mostly use cash, that’s most.  

Person: I mainly pay for things on my phone.  

Today's digital landscape is making it easier for customers to make payments without handling or even seeing the money, with things like digital wallets on smartphones and smart watches, to buy now, pay later services, and of course more traditional credit and debit cards.  

Person: I think it’s just super-efficient, like, you don’t have to worry about counting cash and like getting out a certain amount of cash or whatever. It’s just quick and easy.  

According to the Australian Banking Association, about 40 percent of Aussies go about their daily business without an actual wallet or any bank cards, as long as they have their mobile devices. But the shift away from physical cash isn't a recent thing. It actually started back in 1974 with the introduction of the Bankcard. 

Person, 1970s: Possibly Bankcard is the first step towards the cashless society, but I think it's the first step on a long, long road.  

But things really took off when COVID-19 did its thing. Online shopping soared in popularity as shops were closed and customers faced lockdowns, and many of the shops that did remain open moved to accept card or digital-only payments to minimise the transmission risk. The pace that Aussies have embraced digital payments since has put us among the top users in the world, ahead of the U.S., UK, and some European countries. Besides the convenience there are other pros to ditching physical dollars. Some people say that it'll actually help reduce crime, by letting authorities track where money is going, and stop people from avoiding tax. It also makes converting money to different currencies much easier.  

Person: Some pros would be um, not having to worry about losing money, not having to worry about losing your wallet.  

Person: It’s most probably easier to work with.  

Person: Yeah, it’s probably just more compact, easier to carry.  

Person: Transactions will be done quicker, more efficiently and ah, for some people it’s more convenient for them.  

Person: There’ll be less robberies on stores as well.  

Before you go and torch your cash though, don't actually do that. It's illegal. There are also downsides to going completely cashless. One of the main concerns is to do with data and privacy. Information from every online transaction is owned by your bank or tech companies, which can be used to create a spending profile, more specific targeted ads, and also leaves your details susceptible to hackers. Then, there are things like the recent Optus outage. It caused havoc for millions of customers and businesses around the country as many EFTPOS machines lost connection and customers couldn't access their banking. 

Person: Well, I can’t get into my bank, so I can’t get a coffee this morning which is a bit sad. 

Some businesses reported losing as much as 80 percent of customers since they could only accept cash payments.  

Business owner: Anyone that’s on the Optus network, completely wiped us out.  

Business owner: We lost a lot of customers, and um people are eating, and some of them went to the bank and never show up, never came back from the bank. 

There are also concerns that a cashless society would affect demographics who may be less tech-savvy or live in rural areas with less reliable internet connections.  

Person: It’s not 100 percent prone that your phone’s going to work, or that the place will have the right technology I guess to take your card.  

Person: We’ve seen how Optus failed the other day, like digital things happen, we kind of need cash every now and then as a backup.  

Person: Emergency money. Like, if you can’t access your bank or something you've always got that cash on you.  

Person: It’s convenient, but for me, I’d say cash is still a very important part and we should keep it, but yeah.   

Experts say we'll never go back to a world where physical cash is the top dog, but cash will still be around for a while, providing nobody sets fire to it, obviously. Again, don't do that, it's illegal.  

The Australian Government has announced a plan to regulate digital payment services to make them safer and more accessible, and Macquarie Bank announced it would be phasing out cash and cheques in 2024, while others like Commonwealth Bank won't be so hasty.  

Matt Comyn, CBA CEO: We certainly have no plans to remove cash distribution. I don't think that that's feasible and I don't think that would be desirable, certainly in the foreseeable future. 

Person: We should keep cash around, but like it’s better to use mostly card and stuff, yeah. 

Person: I feel like cash is more safer.  

Person: Yeah, I think keeping cash as well as a second option is also good for if you lose your card, for instance.  

Person: I think yeah, there’s so many problems with electronics nowadays as well so if something does go wrong, you’re stuck.  

Person: I think for now, keeping some basis like the five, 10-dollar, 20-dollar.  

Person: Like, everyone basically has a card now so there’s no real point in having cash anymore, maybe if there’s a better way to keep track of what you're spending. Yeah, I’m all for a cashless society.