People have been predicting the end of cash for a while now, as more and more consumers are choosing to go cashless.
With the rise of debit or credit cards, contactless payments and cryptocurrencies, it’s no surprise that Australian consumers are increasingly going about their day with zero money in their wallet or purse.
A debit or credit card is a lot easier to carry than trying to squeeze a wallet with lots of coins into your pocket. And a debit or credit card allows one to pay a large sum of money without the hassle of paying a visit to the local bank. If a card has been stolen or misplaced, the bank will send out a new one and reimburse any stolen money, without any additional costs – not so when one loses a bundle of cash.
According to a the Reserve Bank’s 2016 Consumer Payments Survey, in 2017, 52 per cent of Australians used debit cards, while 37 per cent used cash, doubling over the past decade (only 26 per cent used debit cards in 2007). There are over 16 million credit cards in Australia as of October 2017, according to finder.com.au. And we haven’t even gone in to the various non-bank payment methods such as Apple Pay, Alipay and more!
Due to the shift, many countries and banks are reconsidering their payment methods. In 2016, Citibank in Australia decided to get rid of cash at all its branches, due to the lack of consumer demand, as only 4 per cent of its customers made cash transactions at the bank the year before. Some entire countries, including Canada, the UK, Sweden, China and France, are slowly phasing out cash.
There are, however, definite downsides to electronic payment methods.
Many argue that if we become a cashless society, we will have entirely lost our privacy. Unlike debit or credit cards, cash is untraceable, which means if you want to purchase an item without your payment provider knowing what you bought, when and where, you can.
Unlike electronic payment methods, cash is pretty reliable. If a system is down, or the internet has crashed, a shop will always be happy to accept notes and coins (within reason on the coins!). Some consumers also argue that people tend to spend less when they pay with cash, because they can physically see what they’re spending and notice when their purse is empty. And understanding cash involves mental arithmetic, a skill some people believe is lacking in younger generations.
Then there’s the whole understanding of the ‘value of money’, which is a hard concept youngsters when money is a concept that requires imagination, not something you can hold in your hand.