On Dec. 12, Michele Bullock, the governor of the Reserve Bank of Australia, revealed that as much as 75% of Australians are now considered to be “low cash users.” Bullock also noted that the reduction in the use of cash for transactions is putting a strain on the cash distribution system.
Australian Senior Citizens Still Using Cash
According to Michele Bullock, the governor of the Reserve Bank of Australia (RBA), the share of payments made via cash fell from 70% in 2007 to just 13% in 2022. This decline in cash’s share of payments by Australians is further exemplified by the over $730 million (AUD 1.1 billion) drop in the total value of cash in circulation during the 2022-23 financial year.
Bullock, who spoke at the recent Australian Payments Network Summit, said cash is still an important means of payment and storing value for some residents. For instance, while three-quarters of Australians are now seen as “low cash users,” the elderly and those residing in certain regional areas use cash for at least 80% of their purchases.
However, despite remaining an important method of payment, the scale of the drop in cash use has created new problems for the central bank.
“The challenge we face is that as the transactional use of cash declines, it is affecting the economics of providing cash services and putting pressure on the cash distribution system,” Bullock said.
To highlight the extent of the problem, Bullock revealed that Linofox Armaguard, a cash transporter whose merger with rival Prosegur was approved earlier in the year, is now blaming the decline in cash use for its misfortunes. Bullock said Australia is now looking at solutions such as the cooperative model which has been proposed by countries that face similar problems.
The RBA governor also suggested that Australians’ declining use of cash is forcing banks to reduce the number of cash access points including ATMs and bank branches. In the future, this will likely see residents traveling farther to access cash, Bullock added. Interestingly, the Australian state has for years forcefully limited the use of cash by way of its legal system.
What are your thoughts on this story? Let us know what you think in the comments section below.
#Featured, #ATM, #CashDistribution, #FiatCash, #Payments, #StoreOfValue