Australia charges towards a cashless economy

Adam Creighton
JUNE 04, 2014
THE AUSTRALIAN

THE cashless economy is rapidly approaching as younger shoppers embrace contactless and online payments systems and even older generations increasingly shun cheques.
Cash payments as a share of all payments have slumped from almost 70 per cent in 2007 to 47 per cent last year, according to new Reserve Bank survey, with a decline evident across all age groups.
Over the same period debit and credit card payments had jumped from 26 per cent to 43 per cent.
“The ongoing shift to the use of PINs in card transactions and the sharp pick-up in the use of contactless payments have both resulted in a reduction in the typical time needed to complete a card transaction,” said Tony Richards, head of the Reserve Bank’s payments department in a speech in Sydney this morning.
Two-thirds of respondents reported that they had a card with contactless functionality and almost half of these reported a contactless transaction in the week of the study. Contactless transactions accounted for 22 per cent of all face-to-face card transactions.
Paypal, a relatively new online payments system that does away with the hassle of inputting card details, has tripled its market share in three years from 1 per cent to 3 per cent of transactions.
Among Australians aged over 65, the biggest users of cheques, the number of payments with cheques has fallen from more than 2 per cent o less than 1.5 per cent.
“Younger households are much more likely to use debit cards than credit cards, presumably reflecting reduced access to credit cards and a preference to ‘use their own money’,” Mr Richards said.
The bank also said its 2009 ATM reforms, which forced ATM owners to stipulate any charges upfront before customers authorised their transactions, had caused the number of “foreign ATM withdrawals” (which typically incur a $2 fee) to drop 8 percentage points to 15 per cent between 2010 and 2013.
The RBA data was based on a survey of 1150 Australians and was the bank’s third payments survey since 2007.