The scary sign Australia is about to go completely cashless

Australia could become a cashless society sooner than expected, with large bank orders for banknotes falling to a new low.

The Reserve Bank, a banknote wholesaler, has revealed that orders from commercial banks for cash in the past financial year were just a third of the usual annual level.

“The use of physical cash for everyday transactions has been declining for years as consumers switch to digital payment alternatives,” the report said.

‘The Covid-19 pandemic has further accelerated this trend.’

With major banks such as Commonwealth and ANZ now operating cashless branches, the $3.1 billion worth of new notes they ordered in 2022-2023 was “about a third of a normal year’s issuance”.

It was too far below the $4.1 billion value of old, returned banknotes, where transporting cash entails major security costs.

This meant that the value of banknotes in circulation fell by one percent in the year to June, marking the sharpest fall in twenty years.

But the value of the $100 banknote in circulation rose 2.4 percent, making it the only denomination whose circulation increased annually.

READ MORE: Warning of a dark, cashless society from Liberal MP

A federal MP has issued a dark warning that Australia will move away from cash as hundreds of bank branches closed in just a year.

Keith Wolahan, the Liberal member for Menzies in Melbourne’s north-east, has warned of a totalitarian society in which banks could ultimately cut off Australians’ ability to spend money entirely – because fewer people use cash.

The Reserve Bank’s 2023 annual report has highlighted the declining popularity of cash.

Ten years ago, banknotes and coins made up the majority of personal payments, but by 2019 this had fallen to less than a third, or 32 percent.

In just three years, the share of personal transactions done in cash has halved to just 16 percent – ​​or less than one in six transactions.

“There has been a broad decline in the use of cash across all demographic groups, although the decline has been greatest for groups that traditionally use cash more, such as the elderly, people on lower incomes and those in regional areas,” the report said. Reserve Bank. .

The Reserve Bank noted that with the use of cash declining, some Australians in regional and remote areas had fewer places to access cash.

“Most Australians have reasonable access to cash and do not have to travel far to withdraw money,” the report said.

“However, there are parts of Australia where communities have few cash points nearby.”

The RBA annual report was released last week, a day after the Australian Prudential Regulation Authority, the banking regulator, revealed that 424 bank branches had closed in the last financial year.

The number of branches has fallen by more than a third or 37 percent since June 2017.

The banking regulator’s figures also showed the mass demolition of ATMs, with numbers falling by 59 percent in just six years.

Last year alone, 718 ATMs were removed.

In just five years, the number of branches in ‘very remote Australia’ has almost halved from 72 to just 40.

The numbers in remote areas, far from a regional center, fell from 145 to 98 between June 2018 and June 2023.

Commonwealth Bank CEO Matt Comyn told a Senate inquiry in September that physical cash costs $400 million, or $40, for each of the bank’s 10 million customers.

“Many of our customers do not use cash and these customers cross-subsidize those who do,” he said.

Security is a major expense and Australia’s two largest cash-in-transit companies, Linfox Armaguard and Prosegur Australia, were given permission to merge by the Australian Competition and Consumer Commission (ACCC) in June.

“Armaguard anticipates a cashless future, not a cashless future, and our intention is to support the ongoing needs of our customers and community by building a reliable and sustainable network,” the new group said in September.

Ten years ago, banknotes and coins made up the majority of personal payments, but by 2019 this had fallen to less than a third, or 32 percent. In just three years, the share of personal transactions made in cash has halved to just 16 percent – ​​or less than one in six transactions

Security is a major expense, and Australia’s two largest cash-in-transit companies, Linfox Armaguard and Prosegur Australia, were given permission to merge by the Australian Competition and Consumer Commission in June (pictured is a Linox Armaguard truck in Sydney)

With fewer and fewer people using cash, the Reserve Bank said cash distribution needed to be profitable “to support the continued provision of cash.”

“The declining use of cash has put pressure on the cash distribution system,” the Reserve Bank said.

The RBA issues and replaces Australian banknotes produced by its wholly owned subsidiary Note Printing Australia Limited, which prints money in Craigieburn in Melbourne’s north.