Within six years, we will have stopped using cash.
That sounds dramatic, right? But it really is time to say goodbye to those quiet cash-in-hand jobs being done away from the watchful eye of the ATO and/or your boss.
The Commonwealth Bank has said Australia may no longer be using cash by 2026, while economist Angel Zhong, an Associate Professor of Finance at RMIT University, is a little more conservative with her prediction that we’ll be cashless by 2030.
Either way, paper money is on the way out. If you’re running a business (or doing the occasional dodgy job on the side), you’re going to need to think about what you’re going to do once we all stop carrying around our physical wallets.
How we know physical money use is in decline
Each year the RBA conducts a survey about how we spend money. It is called the Consumer Payments Survey and the most recent one highlighted the dramatic trend of electronic payments vastly outnumbering those made with physical notes and coins.
Most of us have a sense that people are using cards more and more these days, but it is only when you see the numbers that it becomes apparent just how much using physical money is in decline. Following the RBA’s annual survey, you can see below the trends over the past 15 years. As per the 2023 report, 76% of payments were made by card, whereas just 13% were made with physical money.
In case you were wondering, just 0.1% of payments were made using cheques.
The next RBA annual report will be released in June, which will examine payments made in 2023. Based on those trends, the volume of cash payments being made right now as you are reading this will more than likely be well below that 13% mark.
Even banks don’t want to deal with cash
As everyday consumers are moving away from using physical money, banks are seeing this as an opportunity to save money on the expense of handling cash.
Early last year, major banks including the Commonwealth Bank and ANZ announced it would stop handling cash in some of its branches. Macquarie Bank have taken it a step further and announced it will no longer handle cash in any of its branches.
From 20 May (this coming Monday), Macquarie Bank will no longer give customers branch access to over-the-counter services, deposits, collection of cheques, or the ability to order new chequebooks.
A Macquarie Bank spokesperson said: “The majority of our customers already bank digitally and we’re working very closely to support the less than 1 per cent of our customers who currently use cheques or cash to ensure they have access to other digital payment methods.”
Macquarie Bank is Australia’s fifth-largest bank. It likely won’t be too long until the larger banks make similar announcements.
There are already fewer bank branches in Australia. According to the Australian Prudential Regulation Authority (APRA), between 30 June 2022 and June 2023, 424 branches closed across the country – 122 of those were in regional and remote areas.
Through 2023 there was an 11% drop in the number of ATMs across Australia (or as we call them: “Automatic Teller Machine machines”). Since 2017, we have seen 6000 fewer ATMs across Australia.
“Every business needs to accept cash”
Sorry mate, but no. Regardless what you may have read from that really passionate guy on Facebook, at work, or at the pub on the weekend, a business doesn’t have to accept cash if it doesn’t want to.
Businesses can choose which payment types they accept. It is legal for a business to specify the terms and conditions that they will supply goods and services. This includes whether they will accept cash payment. However, consumers must be made aware of these terms and conditions before they make a purchase.
Businesses should be clear and upfront about the types of payments they accept, and the total minimum price payable for their goods and services.
You might still want to accept cash
If you’re running a business, you might still want to accept cash. Some customers may not yet be comfortable with digital wallets or have privacy concerns for whatever reason. If your business has a lot of older customers, you might want to make sure you’re accepting cash payments just a little bit longer too.
Chris Grice is the CEO of older Australian interest group National Seniors Australia and is heading up a Keep The Cash campaign (which seems a bit futile when you look at the dramatic decline in cash use in Australia). He rightly raised the concern that “Many seniors are not comfortable transacting online because they’re not tech savvy, and they’re concerned about online and credit card scams.”
For the time being, most bank branches are still accepting cash deposits. And for as long as cash is accepted as legal tender, there will be ways to deposit physical money into your digital bank account. But it will become increasingly niche as a service. The day will probably come when you cut out cash payments altogether, but maybe hold out for a while yet.
