COVID accelerates move away from cash

by Madison Utley24 Jul 2020

Since the onset of the COVID-19 pandemic, more than two-thirds (68%) of Australians have reported using less cash in favour of contactless technology and other digital payments methods, according to research conducted by MyState Bank.

Of that group, 67% expect to continue using digital payments methods even after the virus and associated social distancing measures have subsided.

“The rise of online shopping, digital wallets and the whole convenience of digital payment methods has pushed many consumers to reduce or even eliminate cash from their lives,” said MyState Bank MD and CEO Melos Sulicich.

“The speed at which Australia is moving towards a ‘less cash’ or even cashless society is clearly being accelerated by the COVID-19 pandemic.”

MyState data also shows ATM withdrawals through their own network have fallen by 32% in the last year, with rapid escalation in recent months – which reinforces the notion the shift to a society using less cash is occurring rapidly.

The transition is partially explained through the research’s revelation that more than six in 10 Australians (64%) believe they can contract COVID-19 from handling bank notes and coins.

However, notably, 70% of Australians indicated they don’t want a fully cashless society.

“Our research indicates that, as a nation, we are not ready for cash to be banished completely,” said Sulicich.

“At MyState Bank we believe in the benefits of the digital payments system, but we know we have to ensure important members of our community are not negatively impacted by this shift.

“Not all Australians have the means to eliminate cash. There are people in our society which would struggle in a cashless society such as the elderly, the homeless population and those with disabilities.”

For nearly half of the survey respondents, incurring extra merchant fees when paying and network outages were the biggest concerns of the transition towards a cashless society; for another quarter of Australians, it was concern about their reliance on credit products such as credit cards. For the remaining 25%, respondents worried they will spend more with the absence of physical cash.