As Australia rapidly transitions to the digital economy, cash use is drastically decreasing. Cash accounted for only 13% of all payments in 2022, and only 7% of people used cash as their primary means of payment.
Australia ABC reported on the 23rd (local time) that the trend of decreasing cash use is accelerating with the spread of technology that allows users to pay easily using mobile phones, and that even credit and debit cards are starting to feel outdated.
Cash use plunged during the first two years of the COVID-19 pandemic, when online shopping surged, and there has been no sign of recovery since. As economic convenience, transparency and safety improve, international organizations such as the International Monetary Fund are also calling for the phased abolition of cash.
However, there are also voices of concern that the transition to a complete digital economy could penalize those in need. This is because one in five people aged 65 or older used cash as their main payment method, and low-income people used cash more often than the wealthy.
In Sweden, one of the world’s first countries to introduce a cashless economy, there has been strong opposition to the financial alienation of the underprivileged as cash handling facilities have been completely removed from bank branches. In the process of transitioning to a digital economy, the vulnerable class was left unattended by eliminating cash-handling infrastructure.
The demand for cash in everyday transactions is decreasing, but real money still plays an important role in society. According to a survey conducted by the Australian Central Bank, more than 25% of respondents said they would experience inconvenience or difficulties when cash is difficult to access or use.
The amount of cash used to buy and sell goods has continued to decline since the pandemic, but the amount of cash circulated around the world has soared. This is because people are not using cash as a means of exchange, but as a kind of asset retention device.
Cash can also be king in emergencies such as floods and wildfires. This is because when electricity and communication are interrupted, people’s access to funds through digital networks is interrupted. During the Australian floods of 2022, local credit unions even rented helicopters to affected villages where power outages lasted for weeks, delivering cash-filled cash machines.
Workers with insufficient documents, such as illegal immigrants, are also considered vulnerable. This is because card use is fundamentally impossible. Cash can also be a lifeline for victims of domestic violence with limited online financial services and card use. This is because many people hide cash from potentially violent or abusive spouses.
