Australians are ditching cash as more turn to smartphone and digital payments
The number of consumers using their smartphones to pay has doubled in three years, but cash still remains king for those aged over 65.
A cashless economy is closer to becoming a reality, according to the Australian Banking Association, which found that the number of people leaving home without their wallet or cards – relying on their phone or another device instead to pay for goods and services – has doubled in three years.
According to the ABA the rate of consumers choosing to leave their wallets and purses at home, and hence their cash holdings, has risen from 19 per cent in 2019 to 38 per cent in 2022.
And it is younger people leading the “digital wallet” charge, with two-thirds of those aged 18-24 relying on their phone or wearable technology to make payments.
Payments using methods other than cash are also rapidly increasing, with 20 per cent of all payments now conducted using PayID and 15m PayID registrations as at May 1 2023, an increase from 6m in 2021.
One in two Australian smartphone users say they have used their mobile phone to make a purchase in-store, in-app or on a website, an increase from 18 per cent in 2019 to 49 per cent in 2022.
The rapid changes are captured in a new ABA interactive “Spend the Day” site – a comprehensive snapshot of how Australians are using different payments technologies. The new site provides important insights into Australians‘ spending habits in a fast-changing payments environment.
ABA chief executive Anna Bligh said changes in the way Australians do their banking were happening at breakneck speed.
“The transformation of the nation’s payments preferences is continuing at a rapid pace and this new site provides a comprehensive snapshot of the latest trends,” Ms Bligh said.
“Designed to be interactive and easy to navigate and update, the site helps explain the current state of our payments system in Australia.”
In terms of cashless trends, while young people are taking up new payment technologies at the fastest rate, only 9 per cent of those aged 65 and over report leaving home without their wallets or cards.
The ABA report also said that although branches continued to play an important role for those who prefer face-to-face transactions or for complex transactions only 3 per cent of Australians report having visited a branch three or more times in the past month and just 4 per cent of Australians report preferring to visit a branch to check account balances. Although that could also be the result of bank closures, with some towns left without a local bank branch, and other branches having less staff to serve customers at the counter which has encouraged bank customers to shift to online banking.
The cashless society still remains however a pipedream for many. Data issued by the Reserve Bank in 2022, and in the midst of the Covid-19 pandemic, found that cash withdrawals were trending upwards across. The total value of cash circulating in the Australian economy hit record highs of almost $103bn in early 2020, RBA data found.
RBA data released this year showed there was still plenty of cash splashing around the economy, with an estimated 2bn banknotes on issue, worth more than $100bn.
But then trend for using cash continues to be a downward one. The RBA said In 2007 cash was used in 69 per cent of transactions and in 2019 that level was 27 per cent.
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