Australia could be just years away from a cashless society, with disadvantaged and older Aussies expected to feel much of the burden.
Sarah Wells, a finance and money commentator, has predicted Australia will ditch the bank notes and loose change in the next three to five years, with the country’s move towards a fully cashless society essentially inevitable.
“We’re very close to a cashless society … We can’t stop it,” she told news.com.au.
“Our phones and watches are becoming our first choice [for purchases] now. There aren’t as many ATMs around any more, branches are closing down and some retail shops can’t break money.”
The move away from physical currency has been a long time coming with cash accounting for just 13 per cent of all payments made in 2022, compared to 27 per cent in 2019, according to the Reserve Bank of Australia (RBA).
RBA data also shows more than a billion dollars worth of physical cash has disappeared from circulation in the last financial year.
Wells said Covid-19 is one factor that has changed Aussies’ attitudes towards cash use.
“During the pandemic there was this fear around cash, and the fact that people could get sick from it. There were a lot of changes that happened,” she said.
“Then there’s convenience, as Australians, we want to be able to buy online, we want to be able to transfer money quickly, we want to be able to not have to have cash on us. So I think there’s been this push around convenience, particularly from consumers.”
But while a move away from cash offers many benefits, Ms Wells warned we don’t often think about the “unintended consequences” that comes with it, particularly the loss of control.
“Fundamentally, it changes the relationship that people have with money, it gamifies it too much. It (spending money) becomes more like a game with points.”
A cashless society also brings security risks, which could open up Aussies to cyber warfare, ransom and cybercrime.
“Systems can get hacked so it can really make countries and individuals incredibly vulnerable,” said Wells.
“In a cashless society, there would also be little or no human interaction where money’s involved. So I would say there would be no bricks and mortar branches and very little interaction with people in retail.”
Ms Wells said these impacts would be particularly felt by older Australians as well as those in regional and rural Australia, where more than 650 bank branches have closed since the start of 2022, according to estimates from the Financial Sector Union (FSU).
“For older Australians, so much has changed in their life already,” she said.
“A lot of the simple things like going to the bank and having an interaction with a bank teller or paying your bill with cash or simply budgeting, is being asked to change when they are at their most vulnerable.
“When they want to go to the teller and put $50 in their grandchild’s bank account, and they have that interaction with the teller, they won’t be able to do that any more.”
With fewer bricks and mortar branches, Wells warned more bank tellers would be made redundant, as would Australians in other industries.
“A lot of people involved in cash exchange would lose their jobs – people at Australia Post, people who work at the petrol station, where you can pretty much self-serve now, and cash transportation and armour guards,” she said.
Compared to other countries around the world, Ms Wells said Australia is “closer” to becoming a cashless society than the US.
In 2021, Australia had USD$3,020 of bank notes and coins in circulation per person, while America had USD$6,725, according to the Bank for International Settlements.
While she said there is nothing we can do to “stop the train” and prevent the country’s move towards a cashless society, Ms Wells suggested Australians can learn to save money in a digital world by budgeting and setting up bucket accounts for different expenses.
“You’re going to need dedicated cards with different purposes because that’s going to be the only way that you’re going to be able to control it,” she said. “You have to start to build out control mechanisms around how you spend money.”
She also said Australians need to start advocating for people who still predominantly rely on cash to function in society.
“[We need to ask] when did progress become more important than people, and convenience more important than compassion?” she said.
“Let’s not forget about our grandparents, let’s not forget about our neighbours, let’s not forget about people that need cash. We can certainly be better citizens and be kinder and more aware of the impact.”
