Experts weigh in on what the massive CrowdStrike tech outage means for Australia’s rush towards a cashless economy

Experts, pundits, gamblers and even cartoonists have seized on last week’s massive CrowdStike outage to argue that it highlights the dangers of abolishing physical cash. Yet there are still experts who say that a cashless society is inevitable.

Banks, businesses, airlines, broadcasters and government agencies were thrown into chaos after a faulty software security patch from US firm CrowdStrike caused Microsoft operating systems to crash in Australia and around the world.

No longer able to pay digitally, supermarkets, retailers and hospitality businesses had to accept only cash from now on. In addition, the ‘blue screens of death’ even forced some stores to close their doors on July 19.

Steve Worthington, professor of electronic payment systems at Swinburne University, told 7News the outage showed that cash should remain a backup option despite its declining use.

“Cash can’t crash,” he said.

‘I don’t think it’s king yet, but it’s part of the royal family of payments, if you want to call it that.

‘The global outage reminds us of the fragile nature of the modern IT world and its interconnectedness. Someone pulled a brick out of the wall and the wall just collapsed.

‘The cashless society is actually a bit of a mirage. It always seems to be on the horizon, but you walk towards it and it’s gone again.’

Sky News commentator Caleb Bond argued in an opinion piece that ‘if you If you ever needed an argument against a cashless society, you saw it last week.

“There is no quicker way to paralyze a society today than to shut down the Internet and banking systems,” he wrote.

Bond said a malicious hack or new outage “could bring a country – or even the entire world – into complete submission.”

“Whoever has complete control over the flow of money through electronic means has complete control over the world,” he stated.

“Our governments and banks know this,” he wrote.

‘That’s why they like the idea of ​​a cashless society so much.

‘But foreign powers and criminals are also enthusiastic about the idea, because it makes warfare a lot easier.’

He argued that introducing a cashless society in these circumstances would be ‘signing our own death warrant’.

The theme of cash as a means of control was also taken up in the weekly cartoon ‘Please Explain’ which One Nation ran as a satirical commentary and plea.

In Friday’s episode of the cartoon, Anthony Albanese wanted to buy a sausage at a Bunning’s sausage sizzle, but was told he could only do so by card and that there would be an additional charge.

Determined to put an end to this disgrace, Mr Albanese – like Jack climbing the beanstalk in a fairy tale – entered the enormous castle-like ‘den’ of the four major banks, depicted as literal giants in banking attire.

The huge figure representing the Commonwealth Bank lifted the Prime Minister up and handed him a chair ‘here in the palm of my hand’.

Mr Albanese remained determined to stop the move towards a cashless society until the giants told him it was really about power.

“If you stop using cash, you lose complete control,” the ANZ representative said.

“No economic privacy, we can see and stop every transaction,” the NAB giant said.

“He who controls the money controls the world and that could be you,” the Commonwealth giant told an increasingly convinced Mr Albanese.

Mr Albanese went back to Bunnings and said he would be happy to pay for a sausage with his card, even if it meant paying extra. But then CrowdStrike went haywire.

“Why didn’t we keep cash as an emergency measure?” one of the people in line asked in panic.

Following the CrowdStrike outage, many on social media pointed out the need to keep cash on hand.

On the Facebook page ‘Cash is King’, a user posted an image of closed supermarket checkouts showing the ‘blue screen of death’.

“So if it suits them, cash is fine,” the user responded with a shrug and laughing emojis.

“Well I’ll be damned… it’s proven once again that cash is king,” replied another user.

“I just got home from work… My wife is already asking for money. It’s been a long time since she asked me,” another said.

“What a joke and they want to get rid of cash,” was another response.

“Everyone who had cash today is laughing because the banking system collapsed,” read another post.

“Won’t the banks and the government hate this? They’ll be banging their heads against the wall because it proves we’re right,” said another.

Reserve Bank of Australia Governor Michele Bullock warned in December that the declining circulation of cash is putting pressure on the economics of ATMs and the physical movement of notes and coins.

She even suggested that companies could pass these costs on to consumers by charging extra fees for using cash.

Angel Zhong, a finance scholar at RMIT University, has previously suggested that Australia will become a virtually cashless society by 2030, earlier than the Commonwealth Bank’s forecast of 2026.

She explains that digital payments account for more than 90 percent of all payments, while cash would retain its value and not disappear.

Her calculation is based on consumer preference data from the RBA.

The latest 2022 research, published in June 2023, shows that cash accounts for 13 percent of total payments, down from 69 percent in 2007 and 27 percent in 2019.

Dr Zhong said the CrowdStrike outage, which came shortly after the Optus outage in 2023, did not change her prediction but did expose the digital vulnerabilities.

“These outages and incidents are the reason we don’t switch overnight,” she says.

“We are not yet ready to become a 100 percent cashless society. This will undermine consumer confidence in digital payments.”

Dr. Zhong urged financial institutions to use the recent outage as an opportunity to shift from reactive to proactive risk management by improving systems resilience.