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There has been a surge in cashless payments during the COVID-19 pandemic, igniting expectations, and fears, that Australia and New Zealand could become completely cashless societies.
A big new study by researchers at Gartner for accounting and payment software provider Capterra found that 45 per cent of people are not comfortable with the idea of a completely cashless society. Other surveys have put that figure as high as 95% of consumers who want to keep the right to use cash.
Gender, income and age play a pivotal role in people’s readiness to accept cashless payment options,” said Capterra’s Lead Content Analyst Anna Hammond.
‘Even if 100% of shops in Australia accepted cashless payments, a fifth of Aussie shoppers would still feel the need to carry cash,” Anna told CashWelcome.ORGthis week.
“There are several components that can influence a person’s openness towards cashless payments. A person’s tech-savviness plays a big role in their need for carrying cash.
“83% of over 56 year-olds don’t have a mobile wallet.”
“For example, 82 per cent of under 25-year-olds have a mobile wallet installed on their phone, while 83 per cent of people over the age of 56 didn’t have one,” said Anna Hammond.
Without a mobile wallet, consumers must use their credit or debit cards to make cashless payments. Credit or debit cards can be dirtier than cash. With a mobile wallet a consumer can leave their plastic cards at home and use virtual cards in their phone to make payments.
But it is not just age that determines whether we feel happy about not being able to use cash.
“There was also a difference in terms of gender for mobile wallet adoption rates in Australia,” said Anna Hammond.
“Around two thirds (65%) of men have one installed compared to 53% of women.
“Both men and under 25-year-olds happened to be our most confident respondents in terms of their knowledge around technology.”
Among lower income people earning under $50,000, more than half (55%) do not have a mobile wallet installed.
But it’s not just a reluctance to embrace new technology that is behind the ongoing popularity of cash with many consumers.
Cash is the oldest and still apparently the most trusted budgeting tool of all. Anna Hammond explains:
“The second main factor in why people want to carry cash with them is simply that it’s their preferred method of payment.
“51 per cent of cash-users like paying this way because they find it easier to track and manage their spending,” said Anna.
“This was particularly true for lower-income earners.”
66 per cent of the low income earners surveyed said they like cash for budgeting reasons while half of cash users say they know cash is widely welcomed and accepted pretty much everywhere.
“Fifty per cent of people who said they prefer paying by cash are also worried about being caught out by retail stores not accepting any other method of payment,” said Anna.
A big concern for many people is privacy in the increasingly online, cashless world. Investigative journalist Julia Angwin documented the myriad of dangers to individuals that can flow from misuse of their online and financial information in her landmark bestselling book Dragnet Nation:
“We are living in a Dragnet Nation – a world of indiscriminate tracking where institutions are stockpiling data about individuals at an unprecedented pace.”
Capterra’s survey highlighted that cybersecurity is a concern for Aussies. In particular shopping online is a big concern for more than 80 per cent of consumers.
82 per cent of people said they are concerned about security threats when shopping online.
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And they may have a firm basis for their fears. Dr John Selby from Macquarie University’s Business School identifies four big problems with a cashless economy:
Some media commentary has suggested that Australia and New Zealand could follow Sweden down the path to an almost cashless society. Scott Morrison’s government is proposing to ban cash payments worth over $10,000, with a few exceptions.
The Reserve Bank of Australia, among other government and non-government agencies, have raised concerns about the millions of people who could be excluded in a cashless economy.
However, a big recent report from Deutsche Bank has found that cash will be around and readily available, because people want it, for the foreseeable future. In fact, cash is here to stay but plastic credit and debit cards are set to disappear soon according to the Deutsche Bank survey of 3,600 people across Europe, the USA and Asia.
“Cash has properties that no other payment method has. It helps users remain anonymous and avoids cyberattacks.”
Perhaps our fears and concerns about security online and for our mobile wallets is warranted but our fears about a completely cashless future are overblown.
Cash will be around for a long time yet because people want cash.
