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Will Australia soon become a cashless society?

If you’re the type to pay for your morning coffee with a good-old-fashioned $5 note, you may have noticed the looks you receive across the counter are becoming stranger and stranger in recent times.

That’s because, like much of the world, Australia is an increasingly cashless society. According to the Reserve Bank of Australia, we’re the sixth most cashless society in the world, and the average Australian makes 500+ electronic payments per year.

Mind you, we’re still a long way behind Sweden. In 2019, cash transactions accounted for just 1% of Sweden’s GDP, and it has been widely reported that thousands of Swedes are inserting microchips under their skin just for the sake of making faster payments and speeding up their daily lives.

But where does that leave those of us who aren’t as comfortable with the cashless payments becoming the new normal? Will COVID-19 speed up the transformation? And is a cashless society all it’s cracked up to be, or are there just as many downsides that we should be concerned about?


When it comes to the virtues of a cashless society, there are arguments on (excuse the pun) both sides of the coin.

The most obvious benefit is the convenience. A simple tap-and-go payment with a credit or debit card is faster than fumbling about with change and cash registers.

From a legal perspective, the existence of digital paper trails makes crimes like money laundering tougher to pull off, while currency exchange when travelling internationally (whenever that begins again) will also be much easier.

However, there are definitely downsides too. First of all, there’s the risk of data breaches and hacking – whether it be the release of your personal information stored online, or someone managing to breach security, gain access to your account and drain your bank account.

Furthermore, it may exacerbate issues of economic inequality as those without bank accounts struggle to keep up with the new normal, while others may simply find the temptation to spend too strong, making money management more difficult.


And then there are the issues faced by those of us who simply aren't that comfortable with the use of technology.

If you’ve spent a lifetime going to and from the bank to get your money, you may only just be finding your feet with ATMs, let alone cashless payments and online transfers.

Still, it pays (again… excuse the pun) to know what the options are and a little bit of basics. Here are the three most common ways to go cashless these days.

1. Mobile banking

Mobile banking is a relatively recent technological innovation that has been introduced by all banks alongside the rise of smartphones. By downloading your bank’s mobile app, you can conduct all of your banking transactions from your phone. Check your balance, transfer money between your accounts, pay bills, make payments to others, check your statements and set up direct debits – you can do it all from your app.

2. Tap and Go credit / debit cards

Debit cards and credit cards have been around for a while now, but until recently were limited to ATM withdrawals and swipe / insert transactions at EFTPOS machines, all of which required you to either enter a PIN number or sign a receipt in order to use your funds. Now, with the rise of contactless payment (aka Tap and Go), you simply tap or hover your card over the payment terminal and, voila, you’re paid and on your way.

3. Digital wallets

The iPhone has Apple Pay, an Android phone has Google Pay and Samsung phones have Samsung Pay. These digital wallets exist on your smartphone and allow you to use your phone in a similar way to a Tap and Go credit or debit card. You simply download the Wallet app on your device, link your debit or credit card, and go about your day.

Has COVID-19 sped up Australia’s move to cashlessness?

Across the globe, cash payments have taken a dive as a result of COVID-19, and Australia has been no exception. Most of us will have been to a store in recent times that no longer accepts cash payments.

However, while individual businesses may choose to make this decision for a variety of reasons – some of which relate to COVID-19, others that don't – the good news is that it’s unlikely Australia will shift to purely cashless society anytime soon, and that’s very much because there are still too many of us who aren’t ready to make the change.

“We know that a lot of older Australians have had help in recent times to try and get themselves connected, but we also know that there’s probably about a half a million Australians out there still with bank books, they’ve got no cards that they can use, and they still need banks,” National Seniors Chief Advocate, Ian Henschke, told 7NEWS Perth recently.

“We’ve seen overseas where they’ve tried to push things too quickly and they’ve had to bring in laws to allow people still to have access to cash and to chequebooks and to banks. I think it’ll be a generation before we see all Australians comfortable with online banking.

“You’ve got to remember that 2.5 million Australians don’t have access to a computer or the ability to do things online. I think banks should recognise that they provide a service in the Australian community, and even if you’ve only got a few hundred thousand people, that’s still a group of people that need their service.

“I would say to the banks that it’s important that they still provide a service over the counter, people that still want cash, people that still use chequebooks. That’s still a large number of people.”

So the good news is that, in most places, you should still be able to pay for your coffee with that $5 note.

Until the price of coffee surpasses $5, anyway.