Woman tapping a contactless credit card. Credit card reader with very shallow depth of field.


Cash use is in decline while tap-and-go payments are increasingly becoming the chosen payment method for customers, a survey from the Reserve Bank has revealed.

Based on 17,000 payments from 1,500 people over a single week, the survey found that card payments accounted for 52 per cent of all transactions with cash falling to 37 per cent.

However, Reserve Bank assistant governor Michele Bullock said cash was not dead, nor was it even sick.

“Over a third of transactions are still undertaken using cash and they’re predominately lower-value transactions, but that’s still a very substantial number,” she said.

Bullock said the convenience of contactless card payments had facilitated the move towards a cashless society.

“These days people just tap. It’s much quicker so they’re willing to use it for a $2 transaction whereas in the past they couldn’t be bothered,” she said.

However, it was noted that low-income Australians still valued cash and counted every dollar spent.

“They actually value it as a budgeting tool, because when you’ve only got so much cash in your wallet that’s all you can spend,” she said.

Cheques were also found to still be in use, albeit in a smaller number, circulated by older Australians.

Bullock said a day may come where cheques are phased out.

“They might be but these sort of things are not going to happen unless there are other alternatives,” she said.

Other findings of the survey revealed that Australian consumers used debit cards more often than credit cards, with a small proportion of consumers aged under 30 stating convenience was their most important reason for having a credit card.

“Instead, they tended to perceive debit cards as more convenient for making payments and managing finances, but were more likely than older respondents to value the ability to use a credit card to borrow money or smooth spending.”

The report showed a more than three-fold increase in card payments for low-value purchases from 2013, facilitated by the tap and go functionality.

“Around one-third of all point-of-sale transactions were conducted using contactless cards in 2016, which is 3½ times the share reported by participants in the 2013 survey. As a share of card payments only, nearly two-thirds of all point-of-sale payments were contactless in 2016.”

This story originally appeared on C&I Week. 


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