The end of cash may be coming sooner than we think and the use of physical debit and credit cards may not be far behind.
Analysis from the Australian Banking Association (ABA) has shown significant decreases in the number of people using physical cards or cash to pay for purchases, with more people opting to use technology to pay instead.
According to the ABA data, more than 80 per cent of Australians says they prefer to check account balances, pay bills, or transfer money online.
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The figures also show that more than one in three Australians with a smartphone uses a digital wallet and that one in 10 regularly leave their home without their physical wallet, instead using their phone to pay for purchases (that figure is up from 4 per cent in 2019).
The use of bank branches for banking activities is also on the decline.
According to the data, 72 per cent of Australians reported they did not visit the branch of their main bank in the month leading up to September 2021 and less than 20 per cent of respondents to the survey said that they preferred to do any banking activities in their branches.
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Recent Reserve Bank of Australia data also supports the continued decline of cash and credit cards, with ATM withdrawals decreasing by 20 per cent in the year to August 2021, after falling 16 per cent the year before.
ABA chief executive Anna Bligh said that while the COVID-19 pandemic had influenced these banking choices, they were likely to remain long after the pandemic ends.
“COVID-19 accelerated trends in our society and changed the way we live our lives,” Ms Bligh said.
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“Working from home will forever be more prominent within the workforce, we have steered away from using cash and as a result are seeing an increase in card and technology payments and the existing trend of doing banking online instead of in a branch has only continued.
“As we have seen more people go away from using branches, it’s no surprise to see banks invest in areas where customers prefer to bank, such as in their online platforms and apps.
“Interestingly, one major Australian bank reported digital banking is now the primary channel for its customers aged between 16 and 69, with digital interactions up 10 per cent since 2019. This same bank reported a steady branch usage drop of 32 per cent since January 2019,” she said.
According to the ABA data, the proportion of Australians using digital wallets continued to increase.
The proportion of smartphone owners using a digital wallet (including Apple Pay, CommBank Tap & Pay, Google Pay, Samsung Pay, NAB Pay, WeChat Pay & Alipay) increased to 37 per cent in the 18 months from September 2021, up from 18 per cent in March 2020.
The frequency of digital wallet usage also increased, with just over 71 per cent of users of digital wallets reporting weekly usage in September 2021, up from 40 per cent in March 2019.
While digital payment methods are increasing in popularity, there are still some concerns. Earlier this month YourLifeChoices reported on research that showed vulnerabilities in using Apple Pay.
There may also be more ways that you can pay digitally soon, with eftpos announcing you will soon be able to use QR codes to pay for purchases.
Do you think cash is on its last legs? How often do you use cash? Are you worried you will be left behind by services that prefer payments with digital technology? Why not share your thoughts in the comments section below?
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