Australia could be marching toward a cashless society. Here’s what you need to know.
- Australia could be marching towards a cashless society. Here's what you need to know. There was a stir when Macquarie Bank recently announced it will be phasing out cash and check services from January 2024. Fewer people are using cash due to the convenience of paying with phones, watches, and cards, with the RBA stating ATM withdrawals dropped from 77.9 million inches December 2008 to 29.7 million inches June 2023.
Macquarie's move isn't all that surprising considering it's a digital bank with three physical branches. Rest assured, the big four responded saying they wouldn't be stopping cash withdrawals or deposits anytime soon. So how could Australia become cashless?
Economist Richard Holden told Yahoo Finance it would take government intervention. Holden said, "You could accelerate the process if the government said, we're going to phase out the $100 bill by 2024, then the $50 note by 2025, and the $20 bill by 2026." By giving a time frame for the transition, people would have time to prepare. But given so few of us are withdrawing physical cash, who would need to prepare? Those with the lower income, people in regional areas, and people like your grandparents.
One in five people over 65 are still considered high cash users. And these groups would need to be considered if there was a cashless move. Interestingly, there has been a recent uptick in young people withdrawing cash as a way to control their finances with methods such as cash stuffing. The pros of a cashless society include convenience, transparency and safety, and reduction in costs for businesses handling cash. While a big con would be the impacts on those vulnerable Aussies. What do you think?