While one Australian bank has gone cashless at its branches, recent data shows cash withdrawals have increased at least 3 per cent — which some say is reason for other banks not to follow suit.
Beginning May 20, Macquarie Bank customers will not be able to access over-the-counter cash transactions. Over the next few months, the bank will end all cheque transactions.
Customers will still be able to withdraw cash from ATMs across Australia and overseas without a fee.
Cash Welcome campaigner Jason Bryce said Australians were being “fettered against their will into a cashless society” because banks didn’t want to bear the costs, but Australians still wanted to use cash.
He pointed to Reserve Bank of Australia data that showed Australians made 30,859,700 ATM cash withdrawals in February, up 3.6 per cent compared with February 2023.
The previous month there were 30.2 million ATM withdrawals, worth more than $9 billion, the highest collective sum since July 2020.
Bryce fronted the campaign Cash Out Day on April 2nd this year when people were encouraged to withdraw money from ATMs to signify their continuing need to use cash.
ATM provider Next Payments reported a 6.2 per cent increase in cash withdrawals the country compared with April 2, 2023.
Bryce hopes more banks do not follow Macquarie’s example, saying withdrawal data should give them reason not to.
“Banks can’t create a cashless transaction system that’s 100 per cent reliable, that’s 100 per cent private and is surcharge free and these are the things people love about cash,” he said.
WILL AUSTRALIA GO CASHLESS?
Macquarie University lecturer in anthropology Chris Vasantkumar agreed there was an increase in Australians “cash hoarding” based on withdrawal and RBA data.
But cash was not the favoured method of doing business, with the Reserve Bank of Australia finding cash transactions dropped to 13 per cent in late 2022 from 69 per cent in 2007, he said.
“It’s a question of confidence for lots of folks. People get nervous about the digital infrastructure when they see examples of it going down,” Vasantkumar said.
“It’s my sense that most Australians would be happy to have cash there as a back-up.”
Vasantkumar said there were examples in which countries went cashless too soon and met with pushback from the public.
In Australia, two in five people (41 per cent) reported being “extremely concerned” about the disappearance of cash, according to data from payment technology company Waave.
A lack of trust in banking institutions and financial services, a fear of exacerbating economic inequality, and fear of rising fees are all major issues for the 1,080 Australians surveyed by the company earlier this year.
Vasantkumar pointed to the example of Zimbabwe which, after being forced to go cashless because its central bank was running out of printed money, retreated to issusing cash again after the country’s mobile money service experienced a 72-hour outage in 2019.
In comparison, Vasantkumar said Australia’s move towards being cashless was happening at a better pace.
“It will be interesting to see what will happen in the next six months to 12 months because I think we’ve seen more of a grassroots pushback in Australian society against the idea of being cashless especially with Macquire Bank stopping cash and others might be following suit,” he said.
Despite the hopes of people such as Bryce that cash will always remain an option, Vasantkumar said it is not certain that Australians will have access to cash forever — and that was not entirely because banks did not want to bear the cost.
Cash mover Armaguard revealed in March it was at risk of insolvency because the plummeting use of cash meant it was unprofitable to transport money. Armaguard rejected a $26 million lifeline thrown at it by retailers and banks, saying it would work on its own financial situation.
Vasantkumar said at least for the next decade he believes cash will still accessible, but beyond that it was uncertain.
“My sense would be in 10 years or 15 years people would not be using much cash but it would still be around, now it is a question how long can this distribution last and is that going to be the thing that forces us to go cashless even if we don’t want to,” he said.
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