‘People will always want to use cash’: RBA governor says cash is still relevant in Australia
Australians still need cash and won’t abandon it entirely for plastic, tap-and-go payment systems, according to the country’s top banker.
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Cash is far from dead in Australia and there remains a strong need for people to hold notes and coins in their wallets, the nation’s top banker said today.
The Reserve Bank of Australia’s governor Dr Philip Lowe said the high costs of plastic payments including surcharges and continuous banking outages has resulted in the absolute need to maintain the use of cash in Australia.
Speaking at the Australian Payments Network conference in Sydney on Tuesday he said cash now only accounts for about one quarter of day-to-day transactions.
“In the future I feel cash is going to be the payments instrument to use when a payments disaster happens or there’s a failure of the electronic system,” Dr Lowe said.
“Most of us who use tap and go payments all the time still carry some cash in our wallets or purses because you can’t be 100 per cent sure that you are going to able to use the electronic system.”
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The banking system has been riddled with outages by some of the nation’s top banks this year.
This included the meltdown of the Commonwealth Bank’s payments system in October that resulted in them reimbursing $7.5 million to customers who were caught up in the debacle.
An IT failure led to many customers being impacted and they were left without receiving their regular pay cheques for days.
Dr Lowe said Australians “are still going to want to hold some bank notes” in their “wallet or purse just in case”.
“While ever there are outages and there are high costs of electronic payments, people will always want to use cash,” he said.
“I can see the end of the cheque system but I can’t see the end of the cash system though.”
He said there had been multiple occasions in 2019 where “businesses have not been able to sell goods and services because their electronic payments system was down and people didn’t have enough cash in their wallets”.
“It’s really important to the economy that our electronic payments system is working well,” Dr Lowe said.
He also said around 80 per cent of point-of-sale transactions are now “tap and go” payments which is much higher than other countries.
However he said he still wanted to see improvements to the safety of electronic payments to help reduce card-not-present fraud.
Dr Lowe also said since the rollout of the New Payments Platform in early 2018 – which allows the faster processing of payments – approximately 66 million Australian bank accounts are able to make and receive payments quickly.
The use of PayIDs – usually a mobile number or email address linked to a bank accounts – is increasing and more than 3.8 million are registered to date.
Originally published as ‘People will always want to use cash’: RBA governor says cash is still relevant in Australia