Yahoo Finance Aussie banks issue cashless warning: ‘Going digital’
Australia is in the midst of a “digital banking boom” as cash usage dwindles.
Cash is no longer king in Australia, with a surge in people now opting for digital payment options over withdrawing cold hard cash. The findings have sparked a message from Australia’s big banks.
Research from the Australian Banking Association (ABA) found mobile wallet transactions have increased 18-fold since 2019. Last year alone, digital payments skyrocketed 35 per cent.
Customers of the major banks made $126 billion in payments with their mobile wallets in 2023, overtaking total ATM cash withdrawals (which were $105 billion) for the first time.
RELATED
Young Aussie bucks cashless trend and reveals insane results: 'Gone through the roof'
Dark reality of cashless fight: Aussie 'took cash away and problems stopped'
ABA CEO Anna Bligh said Australia was in the midst of a “digital banking boom” but stressed banks would continue to support those who still preferred to use cash and face-to-face banking services.
“This report shows that Australians are using less and less cash, but we’re not about to become cashless anytime soon,” Bligh said.
“Banks still maintain a strong branch network, with Australia still having a higher branch density than the OECD average, complemented by the availability of face-to-face services at over 3,500 Bank@Post locations around the country.”
Are you worried about your access to cash? Contact tamika.seeto@yahooinc.com
Who has stopped using cash?
The share of payments made using cash has been dropping by about 10 per cent each year since 2007. This drop is being recorded across ages, income and geographic locations, the ABA found.
Interestingly, the biggest change was recorded in those aged 65 and above, who are traditionally the highest cash users. They reported a 69 per cent drop in cash usage since 2007.
Regional and remote Aussies recorded an 80 per cent shift to digital payment methods over the same time period.
Size also doesn’t matter when it comes to cash usage. Cash payments have dropped across all transaction sizes, but the decline is the biggest for transactions under $10.
In 2007, nearly all payments under $10 were made with cash, now that has fallen to just over 20 per cent.
Aussies go digital
Aussies also largely prefer to interact with their bank digitally rather than in person, with face-to-face branch interactions falling by 47 per cent and phone calls by 26 per cent between 2019 and 2023.
Bligh said customers were shifting to digital banking channels at “unprecedented rates”, with 99.1 per cent of interactions now made online or via apps rather than in person.
“Australians are going digital in all aspects of their lives and banking is no exception,” Bligh said.
“Australians are interacting with their bank more than ever before thanks to the ease and convenience of digital banking. They are banking whenever and wherever it suits them.”
The report comes after the ABA inked a $50 million deal with cash transporter Armaguard to keep cash flowing through the economy for at least another year.
Cash advocates have been rallying to keep cash in alive, urging Aussies to withdraw cash from ATMs and banks on certain dates. However, the ABA said this had "no material difference" and said it was not necessary for Aussies to change their cash withdrawal behaviours.
Meanwhile, independent MPs Andrew Gee and Bob Katter have introduced a new bill to parliament that could slap businesses with hefty fines of up to $25,000 if they don’t accept or carry cash.
Get the latest Yahoo Finance news - follow us on Facebook, LinkedIn and Instagram.
