COVID has changed you, right? You use less cash, perhaps a lot less.
Of those who said they avoided using cash, 28% said it was unhygienic; 45% had come across a business that wouldn’t take it.
ATM cash withdrawals using debit cardsReserve Bank of Australia
Cafes and pubs offered contact-free ordering via QR codes, shops were given permission to lift the PayWave limit for transactions without a PIN, and banks were given permission to mail out cards to customers who didn’t ask for them.
One in five of us holds no cash
If the switch away from using cash seems like something we took in our stride, it’s because we’ve been slinking away from it for years.
Contactless card transactions accounted for a record 50% of in-person sales in 2019, up from 10% in 2013. More than one in five Australians reported they held no cash in their purses and wallets in 2019, up from one in ten in 2013.Square
An even bigger 40% said they held no cash outside their wallets.
Toll roads haven’t accepted cash for years. Transport cards such as Myki, Opal and MyWay have grown to the point where they account for 2% of all transactions. Now 5% of face-to-face transactions are done with mobile phones.
It means you would be entitled to think (and entitled to be certain) that we are falling out of love with cash. We need it less than ever.
Yet in aggregate, we are holding more than ever
The value of cash out there somewhere (notes issued in excess of those returned) soared 17% during 2020. In each of the previous ten years, while our use of cash dwindled, our holdings climbed by an average of 5%.
So big was demand for cash during the pandemic that the Reserve Bank opened its “contingency” distribution site twice, in March and in July, to get $50 and $100 notes out to banks being asked for them. At the same time the banks held back on returning poor-quality notes in case they needed them.
The paradox is that while many of us are holding absolutely no cash, and many more are holding none outside of their pockets, some are holding bewilderingly large and growing amounts, which they fortified during the recession.
A clutch of 20s, far more 50s and 100s
- ^ halved (www.rba.gov.au)
- ^ stopped issuing them (www.rba.gov.au)
- ^ study (www.rba.gov.au)
- ^ 23% (www.rba.gov.au)
- ^ 4% (www.rba.gov.au)
- ^ Reserve Bank of Australia (www.rba.gov.au)
- ^ QR codes (www.smh.com.au)
- ^ PayWave limit (www.auspaynet.com.au)
- ^ didn’t ask for them (www.rba.gov.au)
- ^ 50% (www.rba.gov.au)
- ^ no cash (www.rba.gov.au)
- ^ 2% (www.rba.gov.au)
- ^ $4 (www.rba.gov.au)
- ^ experts (treasury.gov.au)
- ^ 17% (www.rba.gov.au)
- ^ March and in July (www.rba.gov.au)
- ^ Depending on who you are, the benefits of a cashless society are overrated (theconversation.com)
- ^ one in 200 (www.rba.gov.au)
- ^ seven (www.rba.gov.au)
- ^ six (www.rba.gov.au)
- ^ five (www.rbnz.govt.nz)
- ^ 200 years (www.rba.gov.au)
- ^ Reserve Bank of Australia, ABS (www.rba.gov.au)
- ^ Where’s the Money? An Investigation into the Whereabouts and Uses of Australian Banknotes (www.rba.gov.au)
- ^ Limiting cash to $10,000 is more dangerous than you might think (theconversation.com)
- ^ doesn’t have (www.govt.nz)
Authors: Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University