Glaring $3,750 figure that proves Australia's cashless society is already here
There's more cash around than there ever has been - but it's not because Australians are choosing physical currency for transactions.
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Supplied/Getty
Some have accused banks of "spreading misinformation" about the state of cash in Australia. But the reality is, we already live in a cashless society.
Cash advocacy group Cash Welcome, which is partially funded by the ATM industry, directly challenged comments recently made by Australian Banking Association (ABA) CEO Anna Bligh. The group accused her of promoting the "myth" that Australians are willingly abandoning cash.
"We are, as Australians, using less and less and less cash," Bligh said.
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"In 2007, about 70 per cent of everything we paid for was with real cash.
"These days, it's about 10 per cent, and the Reserve Bank estimates it will fall to around 4 per cent by 2030."
However, Cash Welcome disputes these figures.
They highlight that current Reserve Bank of Australia (RBA) data shows 16 per cent of in-person transactions still use cash, with no publicly available statistics backing the 10 per cent figure cited by Bligh.
To strengthen their argument, Cash Welcome make two points:
The total value of cash in circulation continues to rise, not fall.
Contrary to popular belief, ATM usage is not in sharp decline.
But is the push towards a cashless society genuinely stalling, or are these figures being selectively used?
Let's unpack the data.
There has never been more cash circulating around Australia, despite its declining use in transactions.
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Cash Welcome
Firstly, Bligh is correct that the RBA's projection is that cash transactions will fall to just 4 per cent by 2030.
Interestingly, both the ABA and Cash Welcome agree that despite fewer transactions, there has never been more cash physically circulating in Australia.
Why is there more cash around if Australians aren't using it?
The RBA provided insight into the increase in physical currency in a 2021 paper.
"The increase in banknotes in circulation against the backdrop of declining transactional cash use can be attributed to the growing role of cash for precautionary and store-of-wealth purposes," the RBA wrote.
Essentially, people aren't spending this cash; they're saving or "hoarding" it.
In fact, nearly 73 per cent of current banknotes by number and a staggering 94 per cent by value are $50 and $100 denominations, indicating their use as a store of wealth rather than for everyday spending.
Australian Banking Association CEO Anna Bligh has warned that bank branches have to adapt to the changing nature of banking. (Source: Getty)
Yet, when adjusted for Australia's growing population, the narrative shifts slightly.
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