‘Walk rather than a run to cashlessness’ in Australia, says payments boss
Large-scale technology shifts like the introduction of the Reserve Bank’s New Payments Platform and the rise of tap-and-go are hastening the retreat of cash as a transaction mechanism.
But don’t expect to see the RBA pushing the stop button on its dollar bill production just yet, said the chief executive of the Australian Payments Network, Leila Fourie.
“Cash is traditionally used as a store of value and for transacting. As a store of value the use of cash is on the increase, as a transaction mechanism it is retreating and reducing,” she told a panel session at The Australian Financial Review Innovation Summit 2018 on Monday.
“However, I don’t think we’re at the same stage as the ‘canaries in the world of cashless’ which are Sweden and Norway, and I think it will be a walk rather than a real run to cashlessness”.
Mobile phone penetration – nine out of 10 Australians own one – and the rise of social media was making a cashless society “more viable”, said Ms Fourie, with Millennials driving much of the take-up.
She added that it would be wrong for Australians living in rural areas to assume that using cash would be an easier proposition.
“They have to travel very long distances to get to ATMs to get their cash out and so while cash in some instances is very good, in many instances a digital form might be better,” she said.
Accelerate the decline
“To the extent that we can expand our 4G network and start to introduce Wi-Fi in rural areas across the country, I think we’ll see a material uplift in digitisation.”
While the growth in cash in circulation over the last 10 years has averaged about 6 per cent, RBA statistics last year indicated card use had increased ahead of cash for the first time in history.
Over the past five years debit card use has increased by 87 per cent, while ATM transactions and cheque use declined by 25 per cent and 60 per cent respectively.
Industry watchers have said the birth of the NPP in March this year would accelerate the decline of cash in Australia and herald a new era of e-invoicing to streamline business account keeping.
Jul 30 2018 at 6:00 PM
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