Australia’s drive towards a cashless economy
21 Jul 2020
Ever since the coronavirus pandemic broke out in Australia, the majority of businesses have been shunning cash and favouring contactless payments instead.
The trend was initially given a boost due to a desire to stop the coronavirus from spreading by avoiding physical contact with banknotes and coins, but has since gained momentum.
Bank experts have recently revealed that over the 12 weeks that Australia was submersed in coronavirus chaos, the digital banking revolution was accelerated by about 5 years.
The main reason for this is that physical banknotes and coins were eschewed almost overnight, as people grew more wary about the rapid spread of Covid-19. Another reason is the psychological shift, particularly among those who were not acclimatized to using technology, yet were suddenly forced to welcome a shift to an online world for school, work, shopping, as well as communicating with family and friends. This shift also made them more comfortable with a world of digital payments.
These two factors will likely push Australia to become a cashless society, before initially predicted.
Furthermore, the Reserve Bank of Australia has already made steps towards cash becoming a ‘niche’ payment before its time. Last year, the Morrison Government proposed a legislation which states that paying more than A$10,000 is a criminal offence. Although the Restrictions on the Use of Cash Bill has not yet been finalized, it does lead to four criminal offences, which related to cash transactions for goods or services worth over A$10,000.
Aside from the global pandemic, another driver of the cashless trend down under has been a desire to eliminate the black economy – to put an end to tax evasion, money laundering, counterfeiting, bribery, corruption and terrorist financing, by making space for digital payments.