Last editedJuly 20222 min read
The decline of cash has been slow and steady in the Australian economy over the past 15 years. While it accounted for 69% of consumer payments in 2007, this dropped to 47% in 2013 and just 27% in 2019, according to the Reserve Bank of Australia. In 2020, there were 470 million ATM withdrawals, a drop of 30% in comparison to 2016’s cash withdrawal figures. With debit cards and bank transfers now preferred payment methods for many Australians, is the country headed toward a cashless society? Cashless payment takes on many forms, so here are a few trends to consider.
What is cashless payment?
A cashless payment can take on many forms. The term refers to any type of payment made without physical cash. In Australia, the most popular cashless payment methods include:
Credit and debit card payments
Direct debit payments
In-app mobile payments
Mobile wallets
Cryptocurrency payments
Cashless payment trends in Australia
Though many consumers were already embracing cashless payment methods, the pandemic accelerated this shift to online commerce. Globally, cashless payments are expected to grow by 80% between 2020 and 2025, and triple by 2030. This growth is fastest in the Asia-Pacific region, with an expected 109% growth until 2025 alone in comparison to 2020.
Over the next five years, we can expect a few emerging trends to become more prominent.
Contactless payments: Since the pandemic began in 2020, Australians have started to favour contactless payments using debit and credit cards rather than handling physical cash. Hygiene has become a priority for many, with cash withdrawals decreasing and the convenience of mobile payments increasingly attractive. According to research from MyState Bank, 67% of Australians reporting that they used less cash during COVID-19 stated that they would continue to favour contactless payments.
Digital currency: Both private sector cryptocurrencies and virtual tokens that represent a nation’s currency, or CBDSs, are expected to pick up over the next decade or two. While the crypto market has been fluctuating in value, overall central banks are still looking at digital assets as an increasingly viable option.
Mobile wallets: Many of us already use services like Google Pay and Apple Pay, allowing consumers to load multiple cashless payment methods into a single, convenient mobile app. Digital wallets will continue to become more popular, with more consumers shifting to paying by QR code and other mobile technologies. There’s also expected to be a shift from retail payments to increased B2B payments using mobile payments.
Cross-border payments: Until recently, sending and receiving money abroad involved long waiting times and hefty fees. Non-bank providers and apps have streamlined this process, allowing consumers to send payments in their local currencies for goods and services purchased abroad.
The future of cashless payment in Australia
Although there’s been a rise in the prevalence of cashless payments, Australia is seen by economists as moving more towards a ‘less cash’ society rather than a fully cashless society. It may be a few years before cash is ruled out completely, but in the meantime, businesses will benefit from offering a variety of cashless payment methods to their customers.
GoCardless offers a cashless payment solution that enables businesses to take payment directly from their customers’ bank accounts. It offers all the prime benefits of cashless payment, including convenience, speed, and security, with low fees and no set-up costs. With direct debit services, you can take both one-off and recurring payments as needed without the fuss of handling cash and making in-person deposits. GoCardless also integrates seamlessly with over 200 global partners like Xero, to keep accounting, invoicing, and payments all in a joined-up workflow.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.