Our three minute speaker at this week's Zoom meeting on 7 July was Rotarian Bernie Edwards who spoke about the move away from cash. The text of Bernie's talk follows:
At the beginning of March I put my loose change on the bedside table. Since that time, I haven’t touched it. Even more the point – since then I haven’t used hard cash at all; it has all been by card.
This got me to start musing about the demise of cash.
I expect that you have noticed that there are stores in Mt Eliza which, prior to Covid, would not accept card payments but now want you to use plastic and are not at all keen on hard cash.
The Royal Australian Mint has seen virtually no demand for coins in 2020. There was a 53% decrease in demand for coins between 2013 and 2019 and this has accelerated in 2020.
In contrast, the Reserve Bank , which controls the bank notes, has seen an significant upswing recently in the demand for $50 and $100 notes but this has been put down to precautionary savings in a time of uncertainty rather than for transactional needs because $5,10 & 20 demand is diminishing.
Not much noise has been made about legislation going through Parliament, banning the use of cash for transactions over $10000. That’s not loose cchnage but it does further emphasise the trend.
The elimination of cash may not be at hand. We may not reach the same level as Sweden where only 2% of transactions are in cash. Even so, there are some predictions of its demise during this decade but it is certainly going to become a niche payment method.
Asia-Pacific is leading the way for mobile payments – Singapore has announced that it wants to be cashless by 2025 and China has the largest card network in the world with 7.6 billion cards, the vast majority being debit cards.
There is a benefit to our economy through the elimination of cash payments which is estimated at between $6 and $10 billion in additional tax revenue.
Banks would love to get rid of cash handling – it is their highest cost transactional activity. Think of tellers employed, ATM’s maintained, strong room construction, and secure cash transportation. There has been a strengthening trend towards reducing the number of ATM’s as ATM transactions diminish.
In addition to their own e-payment systems, Commonwealth, Westpac and NAB have joined together to provide an app called Beem It, which has now been downloaded around 1 million times. It is particularly aimed at the millennials and Gen Z and has expanded capabilities around a financial transaction. It is a further sign of change.
The Salvation Army and Legacy have been implementing tap-and-go donation machines which are geared to be more streamlined than the EFTPOS machine. The Big Issue magazine (sold on the street by homeless, marginalised and disadvantaged people) is now accept PayPass. Buskers now have specialised digital QR codes (black & white pixel pattern) which enable passers-by to donate by scanning a printed picture through messaging apps.
So with less cash transactions, we need to look at how this may affect our Club. Consider gate takings at Farmers Market gates or our sausage sizzles which are currently totally cash based for nominal amounts.
It seems to me that we will need to put in some thinking on how we are going to move with the trend
