Time to read : 3 Minutes
Can you remember the last time you paid anything with cash?
We can't either and it seems Covid has only accelerated Australia's change from paper money to contactless. The banks are already preparing for a cashless future.
NAB notes that just 23% of transactions are now paid for with cash – down from 69% in 2007.
CommBank thinks we'll be a cashless society by 2026.
Credit and debit cards are part of the digital wallet revolution.
What you need to know
Right now, the Reserve Bank Australia (RBA) is testing out its own digital currency.
It's part of a broader worldwide move towards countries having their own Central Bank Digital Currencies (CBDC) – in the way that we have an Australian paper currency now.
Older generations are struggling to keep up with the tech needed for this new cashless economy. A recent RBA survey found that 65% of seniors are five times more likely to use cash than other age groups.
The rise of smartphone payment apps, PayPal, Buy Now Pay Later (BNPL) services and card tapping payments, shows that we are getting much more comfortable with being cashless. 71% of Aussies used a form of digital payment in the last year.
Regional Australia has been hit hard by over 575 bank and credit union closures, and are lagging behind the cashless revolution with both poor internet coverage and a slower uptake of digital payment tools.
Indigenous Australians are falling behind too with a lack of financial education and access to computers and internet. The First Nations Foundation runs a Digital Financial Literacy Program which hopes to help bridge the gap.
Today's children are part of the Invisible Money Generation, and teaching them how to understand money and save it, will require new and imaginative methods.
How to prepare
Most of us are doing the majority of our payments digitally already – but, in this changing space it's important to keep on learning.
Make sure that the digital payment service you are using has fraud protection. You can report any suspicious activity to your bank and also to ReportCyber.
Pick the right digital payment service for your needs.
Keep track of your spending, as it's easy to tap and forget.
Protect your digital identity by using strong passwords, deleting cookies and limit ad tracking on your phone.
Be aware: that your electronic spending is likely to leave a digital footprint and having your daily $10 green juice scrutinised may not be fun.
Bottom line
Digital payments are here to stay and it's mostly a good thing – who doesn't love a quick tap at the shops? Just expect some bumps in the transition.
Financial Disclaimer:
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions.
