The perils of a cashless Australian society

23 August 2023

Australian dollar bills and coin, image by Squirrel photos

Image courtesy of Squirrel photos.

Just seven percent of Australians are “high cash” users according to Australia’s central bank, the Reserve Bank of Australia. Tap-to-pay contactless payment methods, which are simple and convenient to use, have dispensed with the need to carry wads of money in our bags and pockets.

In addition, the amount of cash in circulation is at an all-time low, down by a billion dollars in the last financial year, as people use other payment methods. That has some pundits already predicting Australia will become a cashless society sooner rather than later. That’s welcome news for those who don’t feel safe carrying cash, and means less cash handling hassle for people like shop-owners.

But a completely cashless Australia does not suit all. Not everyone has a smartphone, rendering tap-to-pay useless to them. Some people — including newly arrived immigrants — don’t even have a bank account. One or two people are still paid cash for their work, and would be put out if retailers refused to accept cash. Or, for that matter, should banks stop handling cash, as is the case in some places in Sweden, which is seen as one of the world’s most cashless societies.

These factors aside though, some don’t like the idea of government agencies, the tax office in particular, knowing exactly how much they earn. Other people meanwhile crave privacy. They don’t want all their spending recorded on a bank statement, that unwanted eyes might peruse. Mortgage applicants, for instance, may not want prospective lenders knowing how much they spend on, say, coffee, something that’s certainly open to scrutiny when using tap-to-pay.

Despite the gloomy outlook for cash, Australia certainly won’t become cashless overnight, and if there are plans to do away with cash, there would be plenty of warning. The future of cheques makes for a good road map here. According to the Commonwealth Bank of Australia, cheques, which will be phased out in 2030, account for 0.2% of financial transactions.

That’s far less than cash, and there’s a generous seven year warning ahead of their demise. Implementing infrastructure allowing everyone to transact without cash is a process that could take decades. While I can’t see cash being around forever, it’s not going anywhere soon.