Bank passbook accounts face switch to plastic

Banks are looking to move almost half a million people from passbook accounts onto debit cards.

Banks want passbook holders to make the switch to debit cards Picture: AAP

Almost half a million Australians will be contacted in the coming days and weeks as banks look to move them away from passbooks and onto debit cards in a bid to facilitate payments amid COVID-19 lockdowns.

The Australian Banking Association on Wednesday announced the big four banks as well as the major regionals Suncorp, Bank of Queensland and Bendigo and Adelaide Bank would all participate in the program.

Australian Banking Association CEO Anna Bligh said the move to offer debit cards to passbook users was important in keeping older people connected.

“The industry has recognised that as a result of the government’s social distancing advice, particularly for older Australians, we must provide additional options for people to do their banking and pay for goods and services,” Ms Bligh said.

“We understand that some people who haven’t used a debit card in the past might have concerns over safety and security. However, they should be rest assured that it’s safe, its secure and you can track your spending.”

The debit cards will be free and banks will bear the cost. However, it is unclear whether the banks may save more by moving some customers away from transactions in branches.

But current numbers suggest few users may be willing to take up the offer.

ANZ, which has 7000 passbook users, has been contacting customers since before Easter but has only had 7 per cent of those customers take up the offer. Those who do can choose to attend bank branches to receive their card on the day or receive it via mail.

The busiest participant will be Commonwealth Bank, which said it had almost 400,000 passbook users.

CBA said it would be sending debit cards to all its passbook customers who do not already have one and they could then choose whether to activate them.

Many users of passbooks are elderly and must attend bank branches to access their accounts and withdraw money.

Several local bank branches have also been closed throughout the country in recent weeks, leaving passbook users unable to access their accounts.

Current health advice recommends people over 70 should stay at home whenever possible.

Retailers are also encouraging customers not to use cash so as to minimise COVID-19 transmission.

Data also shows that the virus-fed spending surge has peaked, with CBA card data showing buying has moderated.