Ever turned out your pockets and been delighted to unexpectedly discover a $20 note? It’s a “good old days” tale you could be regaling your kids with much sooner than you might’ve imagined.
A little more than 100 years ago, Australia’s first banknotes were issued – and 50 years on we adopted the decimal currency. Now the nation has begun its sprint towards a cash-free future. In fact, it’s predicted Australia will be cardless within a year, and cashless by 2020.
MasterCard’s “Cashless Journey” project categorises Australia as a country at a tipping point where “all the factors appear to be in place for a substantial move away from cash”, and gives Australia an 87 per cent “readiness-to-go-cashless” score.
Aussies are embracing the technology that’s replacing dollars and cents, with Westpac bank reporting a 200 per cent increase in customers using smartphones to tap and pay.
Alyson Clarke, principal analyst with financial research firm Forrester, says we’re proving to be very fast adopters of smartphone tap-and-go technology.
“I expect there will be a good take-up of these services in Australia, more than in other economies... Australians are going to demand it,” she says.
For the banks, the big payoff is the information they collect whenever we tap, swipe or click instead of using cash. Each time we choose to pay electronically, we hand over information about ourselves. Our shopping habits, lifestyle choices and family situation are all revealed by our payments.
In the age of personalised digital marketing, this information is used to try to persuade us to buy more, and more often.
It can also potentially be used against us. A health fund, for example, could scrutinise dietary, exercise and doctor visit habits to vet customers they will, or will not, cover.
There’s also concern that a cashless society would impact most heavily upon those who already struggle. Homeless people and some charity collectors rely on spare change, while many small shops, stalls, markets and school fetes predominantly use cash transactions.
Doing without cash is about to get even easier this year. We’ll soon be hearing about the New Payments Platform, which means money can be transferred 24/7 without BSBs, account numbers and long processing delays.
Richard Holden, professor of economics at the UNSW Business School, believes Australia is “perfectly positioned to carefully but deliberately phase out cash”. “Of course, we would need to be mindful of the potential impact on older Australians, some of whom are less adept with technology,” he says. “But provision of electronic benefits cards and perhaps even subsidised mobile devices could take care of these concerns.”