Yahoo Finance Boycott threat as entire Aussie island goes cashless
Hamilton Island’s decision to go cashless reflects the “hidden costs” of paying with cash, an expert says.
A popular Australian tourist destination won’t accept cash ever again after deciding to remain “a cashless environment” even after pandemic restrictions eased.
A sign spotted on Hamilton Island stated the Whitsunday's destination was "cashless", with the travel hotspot's website also confirming it does not "accept cash at any of our outlets".
The move has enraged some would-be travellers, who have threatened a boycott, but RMIT associate professor of finance Dr Angel Zhong told Yahoo Finance the reasoning behind the shift reflected the “hidden costs” of using cash.
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Why is Hamilton Island cashless?
The Queensland holiday destination said there were three reasons it had opted to remain cashless: the health and wellbeing of guests and staff, the convenience of card payment for guests, and security.
“With or without COVID, research shows that germs can be transferred by paper money and it contains more viruses than a toilet seat,” Zhong said.
“By using cashless payments, we can actually protect the older generation who are really vulnerable to bacteria. But I also understand the older generation is one of the groups that prefer to use cash.”
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Along with the potential health costs, Zhong noted there would be costs involved with transporting cash to the island, along with the costs on businesses to collect, count, reconcile and bank cash, and security costs.
It comes as the future of Australia’s largest cash transport business, Armaguard, remains uncertain after it rejected a $26 million lifeline from Aussie banks and businesses and instead opted for a smaller $10 million deal from its parent company.
Hamilton Island notes it currently imposes a 1.25 per cent surcharge for all ‘credit’ and ‘tap and go’ transactions made on the island via credit or debit card. Customers can make fee-free card payments via EFTPOS by inserting their card and selecting cheque and/or savings account.
Tourists have the option to withdraw and deposit cash at the Australia Post outlet, where cash can also be exchanged for prepaid or top-up Mastercards.
Aussies say they ‘won’t be going’ to island
Hundreds of Aussies have expressed their outrage over the island’s decision to remain cashless, with many saying they would not holiday there anymore.
“I guess I won't be going to Hamilton Island. The whole island is cash free,” one person said.
“Yes it’s definitely off the holiday list of places!! Loved spending time there!! Not anymore,” another said.
"I got married there years ago. Have been wanting to go back, but certainly won't be now," said another.
Other Aussies questioned what would happen if there was a power outage or EFTPOS machines went down on the island, while some argued there should be no card surcharges if cash wasn’t a payment option.
This comes a week after pro-cash advocates flocked to banks and ATMs to “protest” against the country going cashless.
Zhong said she understood the backlash over the move given many Aussies still preferred to use cash over card payments.
“In spite of the ongoing increase towards the use of cashless payments - now only 13 per cent of payments are made using cash - there are always certain groups of Aussies who still prefer the use of cash for various reasons,” Zhong said.
“For example, maybe they don’t have digital literacy or some people do have privacy concerns that their use of cashless payments could be tracked.”
She noted it was legal for businesses to impose card surcharges but they needed to display this to customers before they made a transaction.
The Australian Competition and Consumer Commission notes surcharges cannot be more than what it costs the business to use the payment type.
Hamilton Island was unable to comment.
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