Cash won’t disappear for decades, experts say as ATM withdrawals up

Cash remains resilient despite banks closing branches and ATMs, and new research suggests peoples’ money mindsets play a role.

Almost three-quarters of Australians are worried about shifting to a cashless world, and the idea of cash nostalgia is impacting many.

As banks and businesses reduce access to cash, new research found 71 per cent of people are concerned about going completely cashless – especially Baby Boomers, regional and lower-income Australians – while separate official statistics suggest cash could be making a comeback.

Research by payments technology company Waave found 41 per cent of Australians are “extremely concerned” about going cashless. Two-thirds say it will exclude people and exacerbate economic inequality, 58 per cent worry about paying more fees, and 42 per cent say they will miss the chance to handle money.

Waave CEO Ben Zyl said this “cash nostalgia” reflected the fact that people liked the feel of money and tended to spend less when paying in cash.

“The psychology around cash is unique,” he said.

Australians still love to count their cash. Picture: iStock

“People fear losing the sense of control and visibility over what they actually have.

“It would be a sad moment when a child needs to leave their BSB and account details under their pillow for the tooth fairy.”

Waave’s research found the people most concerned about disappearing cash were Baby Boomers (82 per cent), regional Australians (77 per cent) and households with incomes below $100,000 (75 per cent), while 46 per cent of Generation Z were not concerned.

Mr Zyl said the financial services industry needed to build trust in digital payments as cash acceptance diminished, but he did not expect cash to disappear altogether.

Reserve Bank of Australia figures show cash’s share of total payments dropped from almost 40 per cent in 2007 to less than 10 per cent between in 2022, although its latest ATM withdrawals statistics suggest cash use remains resilient.

The RBA says Australians made 30.2 million ATM withdrawals in January – the highest number in 12 months, and more than $9 billion was taken out, the largest amount since mid-2020.

This cash comeback was “quite a spike”, said RateCity research director Sally Tindall.

“The statistics show how popular cash is among many Australians,” she said.

Ms Tindall said many banks had been reducing ATMs and branches, with some removing cash withdrawals from some shopfronts, but she expected cash to circulate for decades.

“Cash is on the decline but we are still taking $9bn out of cash ATMs a month,” she said.

Cultures and traditions continued around cash, and parents still enjoyed using it to teach their children money basics, Ms Tindall said.

“When technology fails, and we have seen that time and time again, cash is a fantastic and very reliable backup,” she said.

“It’s nostalgia and there is a level of practicality – it helps people feel safe.

“In time cash may disappear completely, but the trajectory is a lot longer than some people may have you think.”

RateCity’s Sally Tindall says cash will linger for longer. Picture: Tim Hunter.

Cash Welcome campaign spokesman Jason Bryce said the latest RBA figures showed many Australians were choosing to return to cash.

“Everyone is concerned about their privacy, their safety from online scams and the uncertainty caused by regular payment system outages,” he said.

“The increasing number of cash withdrawals is being made at a decreasing number of bank-owned ATMs, contradicting the commonly repeated bank claim that branches and ATM closures are caused by changing consumer demands.”

Waave’s Mr Zyl does not expect a complete cash comeback.

“Australians are shopping online more and we look for the most convenient options to pay, hence the sharp increase in mobile-tap payments,” he said.

“Cash acceptance will diminish as the cost of handling cash will outstrip the need to accept cash as a means of payment.”