Finance expert weighs in on ‘cashless’ Australia
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The transition towards a completely cashless society is a complex change that brings about both benefits and risks—but what will it really mean for Australians?
Finance expert Sarah Wells predicts that Australia will become a 'technically cashless' society by 2024, as people move away from using bills and coins in favour of a more convenient 'tap and go' lifestyle.
This comes with benefits like not having to fiddle pockets at a busy bar, or worrying about losing your wallet, and it's largely driven by the rise of smartphones and cutting-edge bank technology.
When asked about the issue by a news source, Wells revealed that Australia has already 'lost' a billion dollars' worth of physical cash from circulation.
While this money still exists in digital form, the trend of consumers opting to go cashless has nearly caused notes and coins to become obsolete, according to Wells.
‘All the changes we have seen have put us in a situation where we no longer need cash,’ she added.
‘There hasn’t been a requirement for it to come back out into circulation. Because people aren’t popping down and taking money out of the ATM or going to banks anymore,’ Wells said, adding that cash transactions in Australia are now only 13 per cent.
This was put to the test last month when Optus shut down for a number of hours, causing businesses across the country to lose out on the dealings that would be guided by electronic payment methods.
But it also reminded people of the possibility of a nationwide crisis should networks fail Australians, making some start actively carrying cash again to be safe.
Wells also expressed that the Optus incident was a wake-up call prompting some people into carrying more cash than they usually do. She shared that, ‘There was a caller that rang up and said he was at the supermarket and out of eight people he saw go in and buy groceries, six of them were using cash.’
And therein lies one of the risks of doing away with physical money, if a major financial situation arises where people suddenly attempt to withdraw their savings en masse, the strain on cashless systems could prove disastrous.
'The challenges we have with moving towards a more cashless society, or what I call a less cash-dependent society, is if we’ve lost a billion dollars, that means that there’s a billion dollars less going into ATMs for us to use,' Wells said.
‘So if we start to have more outages, or we have more challenges, people can go to an ATM, but the cash might not be there.’
To make sure things don't reach breaking point, Wells suggests that people start withdrawing cash and using it more regularly. She believes that if people put in the effort to reintroduce the demand for physical money, the supply will follow.
'We are in a situation that we have created ourselves,' Wells said.
'All we have to do is change our behaviour. If every Australian went out and withdrew $100 a week, instead of buying stuff. You know what? We’d end up with more cash in the system, kids will know about cash, stocks will start taking cash.’
'If we don’t want to live like that, we have to inconvenience ourselves a little bit and change the supply and demand.'
The embracing of stable digital systems caused the cashless revolution to progress. Many now have faith in apps to store and secure their money.
Some companies like Uber and AirBnB built empires promoting convenience, complemented by good security systems. Now it has become the norm, even though their business model would have turned most people off before.
‘If you told me when I was 28 that in 2023 I would be getting into a complete stranger’s car and trust an app, or go and stay in a complete stranger’s house. I would have said you were crazy,’ Wells said, expressing that concerns about privacy were for anyone who owns a phone and disregards the cashless society idea.
The digitalisation of money has also changed how we spend it, with some purchases made almost thoughtlessly these days due to the ease of tapping our phones.
This makes it especially dangerous for children who have never seen physical money and could cause them to grow up not understanding the value or responsibility of having it.
‘We started off with EFTPOS (Electronic Funds Transfer at Point of Sale), but it used to be a backup,’ Wells said. ‘Cash was our primary habit, because we habitually went and got cash.’
Amid the country’s advance towards cashless transactions, Wells says two ‘small’ sectors stand to greatly benefit from handling money in its physical form.
‘There are some kids that have never seen money,’ she added.
‘It’s gamified, it’s digits on a screen. So they don’t understand the value or the responsibility to it.’
‘The second group are those that are either experiencing elder abuse or domestic violence. Because cash is not traceable, everything else has a digital footprint.’
There are also people in rural and remote areas who may not be able to access a cashless world due to patchy internet coverage, which requires governments and providers to ensure the banking services they rely on remain available.
Over the years, 1,600 bank branches, mostly in the regional areas, have closed down.
Additionally, regional businesses are concerned that unstable internet access makes them more reliant on the convenience of cash.
‘People in regional areas constantly have challenges around internet access, so using cash is often an easier option, making the local bank branch and cash services important to those in country towns,’ General Manager of Junee Licorice and Chocolate Factory, Rhiannon Druce, said.
RMIT University Finance Expert Dr Angel Zhong said, ‘There should be a big drive to reassure people they have nothing to worry about in ditching cash.’
‘In addition to reassuring, we can help people embrace innovation to enjoy the conveniences of technology,’ she added.
‘Innovation and technology must go hand-in-hand with infrastructure investments,’ Dr Zhong said.
‘The shift towards a cashless society in Australia isn’t just a possibility, it’s already well under way.’
What do you think of this story? Let us know in the comments below!
Finance expert Sarah Wells predicts that Australia will become a 'technically cashless' society by 2024, as people move away from using bills and coins in favour of a more convenient 'tap and go' lifestyle.
This comes with benefits like not having to fiddle pockets at a busy bar, or worrying about losing your wallet, and it's largely driven by the rise of smartphones and cutting-edge bank technology.
When asked about the issue by a news source, Wells revealed that Australia has already 'lost' a billion dollars' worth of physical cash from circulation.
While this money still exists in digital form, the trend of consumers opting to go cashless has nearly caused notes and coins to become obsolete, according to Wells.
Some people are driven to being cashless because of its convenience. Image: Pexels
‘All the changes we have seen have put us in a situation where we no longer need cash,’ she added.
‘There hasn’t been a requirement for it to come back out into circulation. Because people aren’t popping down and taking money out of the ATM or going to banks anymore,’ Wells said, adding that cash transactions in Australia are now only 13 per cent.
This was put to the test last month when Optus shut down for a number of hours, causing businesses across the country to lose out on the dealings that would be guided by electronic payment methods.
But it also reminded people of the possibility of a nationwide crisis should networks fail Australians, making some start actively carrying cash again to be safe.
Wells also expressed that the Optus incident was a wake-up call prompting some people into carrying more cash than they usually do. She shared that, ‘There was a caller that rang up and said he was at the supermarket and out of eight people he saw go in and buy groceries, six of them were using cash.’
And therein lies one of the risks of doing away with physical money, if a major financial situation arises where people suddenly attempt to withdraw their savings en masse, the strain on cashless systems could prove disastrous.
Although being cashless can be convenient, some people still prefer using cash. Image: Pexels
'The challenges we have with moving towards a more cashless society, or what I call a less cash-dependent society, is if we’ve lost a billion dollars, that means that there’s a billion dollars less going into ATMs for us to use,' Wells said.
‘So if we start to have more outages, or we have more challenges, people can go to an ATM, but the cash might not be there.’
To make sure things don't reach breaking point, Wells suggests that people start withdrawing cash and using it more regularly. She believes that if people put in the effort to reintroduce the demand for physical money, the supply will follow.
'We are in a situation that we have created ourselves,' Wells said.
'All we have to do is change our behaviour. If every Australian went out and withdrew $100 a week, instead of buying stuff. You know what? We’d end up with more cash in the system, kids will know about cash, stocks will start taking cash.’
'If we don’t want to live like that, we have to inconvenience ourselves a little bit and change the supply and demand.'
The embracing of stable digital systems caused the cashless revolution to progress. Many now have faith in apps to store and secure their money.
Some companies like Uber and AirBnB built empires promoting convenience, complemented by good security systems. Now it has become the norm, even though their business model would have turned most people off before.
‘If you told me when I was 28 that in 2023 I would be getting into a complete stranger’s car and trust an app, or go and stay in a complete stranger’s house. I would have said you were crazy,’ Wells said, expressing that concerns about privacy were for anyone who owns a phone and disregards the cashless society idea.
The digitalisation of money has also changed how we spend it, with some purchases made almost thoughtlessly these days due to the ease of tapping our phones.
This makes it especially dangerous for children who have never seen physical money and could cause them to grow up not understanding the value or responsibility of having it.
‘We started off with EFTPOS (Electronic Funds Transfer at Point of Sale), but it used to be a backup,’ Wells said. ‘Cash was our primary habit, because we habitually went and got cash.’
Amid the country’s advance towards cashless transactions, Wells says two ‘small’ sectors stand to greatly benefit from handling money in its physical form.
‘There are some kids that have never seen money,’ she added.
‘It’s gamified, it’s digits on a screen. So they don’t understand the value or the responsibility to it.’
‘The second group are those that are either experiencing elder abuse or domestic violence. Because cash is not traceable, everything else has a digital footprint.’
There are also people in rural and remote areas who may not be able to access a cashless world due to patchy internet coverage, which requires governments and providers to ensure the banking services they rely on remain available.
Over the years, 1,600 bank branches, mostly in the regional areas, have closed down.
Additionally, regional businesses are concerned that unstable internet access makes them more reliant on the convenience of cash.
‘People in regional areas constantly have challenges around internet access, so using cash is often an easier option, making the local bank branch and cash services important to those in country towns,’ General Manager of Junee Licorice and Chocolate Factory, Rhiannon Druce, said.
RMIT University Finance Expert Dr Angel Zhong said, ‘There should be a big drive to reassure people they have nothing to worry about in ditching cash.’
‘In addition to reassuring, we can help people embrace innovation to enjoy the conveniences of technology,’ she added.
‘Innovation and technology must go hand-in-hand with infrastructure investments,’ Dr Zhong said.
‘The shift towards a cashless society in Australia isn’t just a possibility, it’s already well under way.’
What do you think of this story? Let us know in the comments below!
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