Australians are shifting from cash-based to cashless societies - report

According to a recent report titled ‘The Cashless Journey’ released by MasterCard, in Australia, cash transactions account for less than 15 percent of consumer payments, leading other major global economies including China and the United States where cash payments represent 45 percent and 20 percent respectively. The most cash dependent economy in the study is Egypt, where only seven per cent of transactions are non-cash payments.

The report highlights that Australia, along with other top countries that have been dubbed ‘nearly cashless’, such as Belgium, France, Canada, Germany and Sweden, has been shrinking the share of cash in circulation for many years now, with further reductions to cash usage expected. One reason for Australia’s advanced position in payments is its nearly comprehensive financial inclusion, with 99 percent of Australians over 15 years of age possessing bank accounts.

The study also points out that even if Australia is ahead of the pack globally, there is still work to be done, particularly in capturing low value payments. Cash accounts for less than 15 percent of the total value of consumer transactions, but it still equates to nearly 70 percent of the total number of transactions.

The research also identifies new technologies, government programs and consumer preferences as key factors driving this shift to a world beyond cash.

The report also finds that of the USD 63 trillion in total global consumer spent in 2011, 34 percent ( USD 21 trillion) was done with cash, with cashless payments accounting for 66 percent (USD 42 trillion).

The survey identifies Belgium (where an estimated 93 percent of the value of consumer spend was cashless), France (92 percent), Canada (90 percent), the UK (89 percent), Sweden (89 percent), Australia (86percent) and the Netherlands (85 percent) as the countries where cashless payments are nearly ubiquitous and attributes these nations’ broad movement away from cash to the uptake of new payment technologies such as mobile, contactless and EMV Chip and a modern payments infrastructure.

Finally, the study also reveals that while countries including the United States (where an estimated 80 percent of the value of consumer spend was cashless), Singapore (69 percent) and Brazil (57 percent) are considered to be approaching a ‘tipping point’ to becoming nearly cashless, emerging economies such as India (32 percent), Russia (31 percent) and Nigeria (10 percent) are just embarking on their cashless journey. As the study points out, in many cases the emerging economies are shifting cash share at a faster pace than their more developed peers thanks to factor such as a growing middle class.