Australia could be cash-free in five years. Here’s how to prepare

Australia will be a cashless society in just five years. This isn’t just speculation from the tech crowd or some wild prediction; it is the informed view of futurist and digital payments expert, University of NSW economics professor Richard Holden.

On my podcast this week, he says: “We are definitely moving towards a cashless society, probably in less than five years,” and the data backs him up.

Once commonplace, the humble banknote could be effectively extinct by 2030.Credit: Louie Douvis

In 2019, cash made up only 13 per cent of transactions in Australia, and today, some major banks report that cash is used in fewer than 4 per cent of their dealings. According to the FIS Worldpay Global Payments Report, Australia is projected to be 98 per cent cashless by 2024, and cash payments are expected to decline to just 2.1 per cent of in-store purchases.

Yet, despite these realities, we’re still lagging. We’re not doing enough to help older generations embrace digital payments, nor are we building the infrastructure needed for those in regional areas, and nor are we providing education and help for people who still feel more secure.

Banks and politicians often tread carefully around the issue, mindful of the large voter and customer base who still want the option of cash preserved.

But this caution may be delaying crucial discussions about how to better prepare and support those who will inevitably face this digital shift. Many are unaware of the full extent of cash’s decline or what’s likely to happen as it fades away – and what they can do.

Here are six insights into the cashless economy that I believe people need to understand better. Some may disagree, but I’m here to be an independent voice of literacy, education and reason.

1. Banks aren’t the villains in the story

When people think about fees in a cashless world, they often blame the banks. But it’s important to understand how digital transaction fees actually work. The fees we see on our receipts aren’t always coming from the banks.

Often, small retailers add their own surcharges to cover the cost of using payment infrastructure, like EFTPOS terminals. As Holden says, retailers have a choice: some absorb these costs, benefiting from reduced risks and labour involved with handling cash, while others pass the charges on to consumers because they can.

The truth is, banks aren’t profiting off every tap; they provide the infrastructure, and it costs money to maintain. Much of the fees you pay at the checkout are set by the retailers themselves. That’s why the government has moved to cap surcharges on card transactions – to stop businesses from overcharging consumers. It’s a move aimed at ensuring fairness at the checkout.

2. Fees will evolve in a cashless economy

As we continue to shift towards a cashless society, fees will inevitably change. With fewer people using cash, maintaining the infrastructure required for handling physical money – like ATMs, bank branches, and armoured cars for cash transport – becomes more expensive and could even be unviable.

The cost of managing cash doesn’t just disappear as fewer people use it; in fact, the costs of keeping cash around go up. This may mean surcharges on cash withdrawals or higher fees for physical currency transactions to cover those costs.

This is likely to be seen in surcharges on cash withdrawals or higher fees for cash transactions to cover those costs. But, in a fully cashless society, digital transactions could become even cheaper, making cashless options more appealing.

By pushing back against the inevitable shift to digital, lobby groups might be slowing down the progress we need.

3. We can better prepare for natural disasters

One of the strongest arguments for keeping cash in circulation is that it’s seen as essential during natural disasters when power and telecommunications might be down. However, modern technology is already starting to address these concerns.

Banks and retailers are investing in back-up systems like generators and satellite-based digital payment solutions to ensure continuity during emergencies. Holden says many large retailers already have plans to keep their point-of-sale systems running when traditional networks fail. Governments and councils could also step up by investing more in robust digital infrastructure for crisis-prone areas, reducing the reliance on cash during such events.

Cash may not always be available in a disaster – bank branches can close, ATMs may run out of money, and small retailers who operate without power while carrying cash put themselves at risk. So why would they want to hold on to cash in those situations?

It’s clear that as a nation, we need to explore and invest in more reliable digital solutions sooner rather than later.

4. Cash isn’t the only teacher for younger generations

There’s a common belief that handling physical money is the best way to teach kids financial literacy. Many of us grew up counting coins and learning to save by watching our piggy banks fill up.

But digital tools today offer even better ways to teach financial responsibility. Apps that track spending, set budgets and allow users to create separate accounts or buckets for different spending goals can provide real-time insights that a handful of change never could.

These tools let young people see how much they’re spending and saving, helping them understand money management in a more interactive and detailed way. Holden says financial literacy doesn’t depend on cash; it depends on the ability to track, manage and plan for financial outcomes.

5. Older Australians are at physical risk carrying cash

Many older Australians feel safer using cash because it’s what they know. But carrying large sums of cash can expose them to physical risk. Theft and robbery are genuine concerns, especially when older people withdraw significant amounts from ATMs to avoid frequent trips to the bank.

In contrast, digital transactions offer protection against theft – if you lose your card or fall victim to a scam, banks can often reimburse you or block suspicious transactions.

As Holden says, the trade-off between physical risk with cash and the perceived digital risk online isn’t as clear-cut as many think. In reality, the safety nets in digital banking (like fraud detection and account recovery) make digital payments a far safer option in the long run. Online scams are a concern, but that’s where the lobby groups could really use their power for the positive – to educate.

6. Lobbyists aren’t always acting in the consumer’s best interest

Finally, we need to talk about the cash lobby. At first glance, they seem to be fighting for Aussies who still want to rely on cash. But is it really about consumer protection, or is it about staying relevant and growing their base?

The taxpayer-funded lobby often claims cash must stick around because older generations prefer it, but by pushing back against the inevitable shift to digital, they might be slowing down the progress we need.

They make it seem like cash can be preserved forever, but clinging to that idea could be holding up the education and infrastructure we need to make digital payments easier for everyone. Holden says if they focused more on empowering people through education rather than hanging onto an outdated system, we’d all be better off. And I couldn’t agree more.

Bec Wilson is the author of bestseller How to Have an Epic Retirement. She writes a weekly newsletter at epicretirement.net and is the host of the Prime Time podcast.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making financial decisions.

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