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Surprising Aussie generation using cash more than Boomers as expert predicts 'bounce back': 'Fed up'

New research has revealed who is using cash the most and if they think it will be irrelevant in the future.

Older Australians who grew up with cash payments might be the obvious poster children for the anti-cashless crusade. But new research has found there's another generation more likely to use cash.

Surprisingly, more than half of all millennials surveyed by YouGov (52 per cent) said they liked to pay with cash, with Baby Boomers just behind them (44 per cent). Debate about the accessibility of cash is rife in Australia as regions are tapped of ATMs and bank branches continue to close, but there's a very vocal group standing by the "cash is king" adage, who even staged a national protest this month.

More businesses are opting not to accept cash and card surcharges are estimated to have cost Aussies almost a billion dollars last year, which is one reason Professor Steve Worthington told Yahoo Finance cash was about to have a resurgence.

Professor Steve Worthington next to people lining up at a bank to withdraw cash
Professor Steve Worthington believes cash will make a comeback as millennials are found to be the generation that uses it the most. (Source: LinkedIn/Facebook)

Are you concerned about your access to cash or surcharging? Contact stew.perrie@yahooinc.com

"We are seeing a slight uptick in the use of cash being taken out of ATMs and I think a lot of people will realise you won't pay a surcharge if you pay with cash," the Swinburne School of Business and Law professor said.

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"That can be a factor when people are getting so fed up. These things do add up over time especially if you buy a lot of things by card or digitally."

Worthington said he was a "strong believer" in the value of cash, and with major banks and supermarkets allowing free withdrawals, he thinks others are drawn to the idea of being able to use their money without financial penalty.

You might think younger Aussies would find using tap payments second nature, but Worthington said inflationary pressures could shift people's behaviours.

"One of the big attractions is that there are no surcharges," he said.

"I've seen in other countries ... as the cost of living reverberates, a lot more people will take cash out of ATMs and be use cash, more so than they have in the past.

"It has been in decline but I think it's about to bounce back."

Interestingly, millennials were the biggest believers that physical currency would become irrelevant in the next decade.

Nearly 60 per cent of millennials reckon cash won't be needed in the future, compared to 53 per cent of Gen Z, 51 per cent of Gen X and 38 per cent of Baby Boomers.

So, will cash really vanish?

Australia is one of the world’s biggest users of cashless payments, with around 98.9 per cent of all bank transactions done online, according to the Australian Banking Association (ABA).

The number of payment cards that have been added to mobile phone wallets has jumped from just two million in 2018, to 15.3 million in 2022.

To combat this trend, Aussies passionate about keeping cash circulating in the community recently staged a protest, where they flocked to ATMs and banks around the country on April 2 and withdrew some money.

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While the ABA noted the collective action didn't really move the needle, the Reserve Bank of Australia (RBA) recently revealed cash withdrawals are up, signalling Aussies are increasingly needing and using physical money.

There were close to 30.86 million ATM cash withdrawals in February, which was 166,400 more than in January and nearly 1.1 million more compared to February last year. Aussies were also withdrawing more, with an average amount of $308 in February compared to $292 in the same month in 2023.

  • Fewer people are using cash due to the convenience of paying with phones, watches and cards.

  • There isn’t a shortage of cash-withdrawal points, with around 20,000 ATMs plus supermarkets to collect from.

  • There’s about $100 billion in cash floating around Australia — or 2 billion notes

  • The government has not indicated cash will be taken out of circulation

  • The Big Four banks have all ruled out going cashless.

  • Average cash withdrawal has increased from $180 to $290.