Australians concerned about the fast-approaching reality of life without cash have been told to put their money where their mouth is.
Forecasts suggest Australia will become a “technically cashless” society in less than two years, with people phasing out bills in their pockets for a far more convenient “tap and go” lifestyle.
It comes with a lot of benefits – no more fumbling with splinters in a crowded bar or festival, and losing your wallet far from the crunch it used to be.
Our love affair with comfort has driven rapid change. All of this, the advent of smartphones and cutting-edge developments in banking technology, played a role in the seismic shift away from cash about 15 years ago.
But no one thought that everything would happen so quickly.
“We’ve never had a cashless society, so we don’t know what that society looks like,” finance specialist Sarah Wells told news.com.au, explaining how quickly attitudes have changed over the past decade or so.
“All the changes we’ve seen have put us in a position where we no longer need cash.”
Ms Wells has previously stated that by 2026 Australia will be effectively cashless.
Australia has “lost” $1 billion worth of physical cash from what was previously in circulation.
Money still exists, but trends set by consumers have almost completely eliminated the need for notes and coins.
“There was no requirement for it to return to circulation. Because people don’t go down and take money from ATMs or go to banks anymore,” Ms Wells said, noting that only 13 per cent of transactions in Australia were still done in cash.
But Australia’s mobile future was tested last month when the Optus ship was completely shut down for more than eight hours.
Many businesses were temporarily shut down and those with urgent purchases were forced to return to ATMs.
Although convenient, the cashless system is inherently tied to fallible communications networks, creating the potential for nationwide chaos if the network goes down for a few hours.
Ms Wells says Optus’s wake-up call may have prompted some people to carry more money than they normally would.
“There was a caller who called in 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,” Ms. Wells said, referring to a radio show she spoke about earlier. Earlier.
One of the risks of a cashless society is the availability of available cash in the event of a major financial crisis.
After years of slowly eliminating banknotes from the system, an event in which thousands of people try to withdraw their savings would be a disaster.
“The challenges we face in moving toward a cashless society, or what I call a less cash-based society, is that if we lose a billion dollars, that means there is a billion dollars less going into the ATM for us to use,” Ms. Wells said.
“So, if we start to have more outages, or have more challenges, people can go to the ATM, but the cash may not be there.”
Wales asked cashless skeptics to vote with their feet, because at the end of the day, it’s consumers who drive the market.
To balance the scales, Australians will need to return to withdrawals and use cash over an extended period to reapply.
“We are in a situation we created ourselves,” she said.
“All we have to do is change our behaviour. If every Australian goes out and withdraws $100 a week, instead of buying things. You know what? We’ll end up with more money in the system, kids. They’ll know about the cash, and the stocks will start to collect.” Cash money.
“If we don’t want to live this way, we have to bother ourselves a little and change the supply and demand.”
Confidence that digital systems remain robust is what has driven the cashless revolution forward. Attitudes have changed over the years, with many Australians now putting all their trust in apps to keep them safe and secure.
Companies like Uber and AirBnB have built empires capitalizing on convenience, backed by tight security systems. They are now the norm, even though the prospect of their business model would have made most people balk a few decades ago.
“If you told me when I was 28 that in 2023 I would get into a complete stranger’s car and trust an app, or I would go and stay at a complete stranger’s house. I would have said you were crazy,” Ms. Wells said, adding that shared concerns about privacy were a point. Controversial for anyone who owns a smartphone and hates the idea of a cashless society.
“Some kids have never seen money before.”
The money game has radically changed how we value and spend our hard-earned dollars. The ease of tapping our phones has opened up more opportunities throughout the day to spend little amounts here and there, whether it’s on a juice machine, a Lime bike, an Uber, or a coffee kiosk.
Not long ago, you still felt disconnected from something materialistic every time you splurged. Now, hundreds of dollars can disappear in the blink of an eye if you’re not careful.
“We started with EFTPOS, but it was a backup,” Ms Wells said. “Cash was our main habit, because we were used to going and getting cash.”
Ms Wells says there are “two small sectors” of society that could “really benefit from seeing money”.
“There are some kids who have never seen money before,” she said.
“It’s a game, it’s just numbers on a screen. So they don’t understand the value of that or the responsibility for it.
“The second group is those suffering from either elder abuse or domestic violence. Because cash cannot be traced, everything else has a digital footprint.
But the tide continues. Over the past six years, 1,600 bank branches have been closed, most of them in regional areas.
In addition to those living in rural areas, statistics show that the elderly, vulnerable people and those with low income still prefer to use cash.
This has raised concerns that people from those groups may be left behind during Australia’s rapid transition to a cashless economy.
Dr Angel Chung, a financial expert at RMIT University, says there should be a big campaign to reassure people that they don’t have to worry about throwing away cash.
“In addition to reassurance, we can help people embrace innovation to enjoy the conveniences that technology provides,” she said.
Adding to the concerns of regional businesses is the fact that patchy Internet access makes them more reliable than most other businesses when it comes to cash.
Rhiannon Druce, general manager of Junee Licorice and Chocolate Factory, said: “People in regional areas constantly face challenges with internet access, so using cash is often an easier option, making the local bank branch and cash services important for those living in rural towns. “.
The pressure is now on governments and internet service providers to ensure that people in regional and remote areas can continue to access banking services in a world that will soon be almost entirely digital.
“Innovation and technology must go hand in hand with investments in infrastructure,” Dr. Chung said.
“The transition towards a cashless society in Australia is not just a possibility, it is already underway.”