Many financial experts agree that Australia will eventually become a cashless society. It is just a matter of when.
Back in 2018, Nick Dryden, the Founder and CEO of the biometric services company Sthaler, predicted it would be within ‘two or three generations’. However, this was before COVID-19 changed the landscape of digital payments forever.
Today, cash is no longer king, as the Reserve Bank of Australia (RBA) recently revealed that these types of payments accounted for only 13% of transactions in 2022, as compared to 69% fifteen years earlier.
In fact, the tide has turned so irreversibly that some experts, including Angel Zhong, who is an Associate Professor of Finance at RMIT University, have even gone on record as saying that the Lucky Country will be completely cashless by 2030.
So, what has sparked this change in the way Australians manage, spend, and save money?
Largely, it is down to the Fintech industry.
Here is an in-depth look at how it is enabling this transition and what it means for individuals and businesses who will have no choice but to embrace this new era.
What is driving this change?
The concept of a cashless society was first mooted in the 1970s when bank cards were introduced in Australia. This move was driven by safety and convenience, with this innovation meaning people didn’t need to carry large sums of money around with them. (Muggings and burglaries were common at this time).
During the COVID pandemic, further groundwork for a cashless society was put in place as retailers and consumers became reluctant to handle coins and notes that were potentially infected with the virus.
This led to the increasing adoption of contactless digital payment methods such as Smartpay EFTPOS machines, which were quicker, safer, and a lot more convenient. Along with it came louder calls for a completely cashless society.
The fact that more and more people are adopting digital payments as their preferred way to pay for goods and services has caught the attention of the federal government. Jim Chalmers, The Treasurer, recently unveiled plans to regulate the providers of these types of payments.
How is the fintech industry facilitating the transition?
The fact that more people than ever are able to pay for their purchases in ways other than cold hard cash is down to fintech companies.
Thanks to major technological advances, consumers now have several payment options available to them whenever they want to buy something.
They include the following:
