Cashless society – embrace it or fear it?

There has been a surge in cashless payments during the COVID-19 pandemic, igniting expectations, and fears, that Australia could become a completely cashless economy. More than two thousand ATMs and hundreds of bank branches throughout Australia have been removed already in 2020.

Plenty of Aussies are not embracing the idea of a cashless economy according to a big new study by researchers at Gartner for accounting and payment software provider Capterra.

Gartner surveyed 1,020 respondents and found 45 per cent of people are not comfortable with the idea of a completely cashless society. Other surveys have put that figure as high as 95% of consumers who want to be able to use cash if they choose.

Who fears a cashless society?

Who are the people fearing a cashless future and who are the people embracing one?

Gender, income and age play a pivotal role in people’s readiness to accept cashless payment options,” said Capterra’s Lead Content Analyst Anna Hammond.

‘Even if 100 per cent of shops in Australia accepted cashless payments, a fifth of Aussie shoppers would still feel the need to carry cash,” Anna told CashWelcome.ORG this week.

“82 per cent of under 25-year-olds have a mobile wallet installed on their phone, while 83 per cent of people over the age of 56 didn’t have one,” said Anna.

Without a mobile wallet, consumers must use their plastic cards to make cashless payments. Credit or debit cards can be dirtier than cash. With a mobile wallet a consumer can leave their plastic cards at home.

“There’s also a difference in terms of gender for mobile wallet adoption rates in Australia,” said Anna.

“Around two thirds (65%) of men have one installed compared to 53% of women.

Among lower income earners (under $50,000), more than half (55%) do not have a mobile wallet.

But it’s not just a reluctance to embrace new technology that is behind the ongoing popularity of cash with many consumers.

Budgeting is the big positive for cash

Cash is the most trusted budgeting tool of all says Anna:

“51 per cent of cash-users like paying this way because they find it easier to track and manage their spending. This is particularly true for lower-earners.”

66 per cent of the low-income earners surveyed said they like cash for budgeting reasons.

“Fifty per cent of people who said they prefer paying by cash are also worried about being caught out by retail stores not accepting any other method of payment,” said Anna.

Does privacy exist in a cashless world?

82 per cent of people said they are concerned about security threats when shopping online.

Dr John Selby from Macquarie University’s Business School identifies four big problems with going completely cashless:

  1. Governments and criminals can (more easily) confiscate your wealth
  2. Reliability (or not) of cashless payment systems
  3. Mobile Wallet security issues
  4. A huge digital divide with many low-income families not having access to laptops

Is Australia going cashless?

No Australia is not going cashless despite Scott Morrison’s government proposing to ban most cash payments worth over $10,000.

The Reserve Bank has raised concerns about the millions of people excluded in a cashless economy and a Deutsche Bank study has found that cash is here to stay because people want cash.

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