Why Australia will be mostly cashless by 2024
You may have just three years to adapt to a world almost completely without cash, according to new research that shows the pandemic accelerated its demise.
The study, released today from Worldpay, showed Australia would be one of the top five nations leading the charge towards a cashless society, Australians were adopting digital wallets and buy-now-pay-later services at a rapid pace.
But experts have warned there could be downsides to having less physical currency circulating in the community, particularly for charities, homeless people, and those using it to track their spending.
The sixth annual Global Payments Report, which analyses trends in 41 countries, predicted cash payments would represent just two per cent of all in-store transactions in Australia within three years - down from 15 per cent - making Australia one of the countries first to ditch cash, behind Sweden, Denmark and Hong Kong.
FIS Worldpay merchant solutions general manager Phil Pomford said Australia was already quick to adopt tap-and-pay technology but the coronavirus pandemic, which saw many stores reject or discourage cash transactions, had achieved "three years' worth of growth in just one year".
"The sun is officially setting on cash. Consumers are cementing their preference for digital wallets and contactless payments," he said.
"The fact that we all live with a mobile phone attached to our hand just makes it easy and that's why we're seeing a shift towards going cashless."
The report found almost one in five Australians used their smartphones in place of a wallet last year, and predicted digital payments provided by companies including Apple, Samsung and Google would double by 2024.
But not all are welcoming the move to get rid of physical money.
Woolworths upset some customers when it removed cash as a payment option in 12 of its Metro stores in Sydney, Melbourne and Brisbane recently as part of a trial.
And budgeting expert and author of Underspent Rachel Smith said removing cash as an option for spending may hurt those who were trying to keep track of their spending and who may not pay as much attention when asked to tap a card or phone at the register.
"Most shops now don't give a receipt so people just don't know what they're spending in a day," she said.
"I interviewed people before COVID and people in Brisbane and Sydney said they could easily spend between $50 and $75 a day and didn't know where the money was going."
Mr Pomford said a reduction in the use of cash could also hit those who relied on donations, and some charities were adapting by introducing QR code and contactless payment options.
He also stressed that the legal tender would not completely disappear in three years.
"We're not suggesting that cash will vanish - it still has a place in the market for some age groups, for tips in restaurants and bars," he said.
"There will always be a place for it but it will be reduced."
The FIS report also fund Australia and New Zealand also led the world in the use of buy-now-pay-later schemes, making up 10 per cent of e-commerce transactions, and online transactions were expected to rise by 48 per cent to $69 billion by 2024.
Originally published as Why Australia will be mostly cashless by 2024