How COVID-19 changed how Australians think about cash
More of us are using mobile wallets and are comfortable with the idea of a cashless society.
The COVID-19 pandemic has changed many aspects of our lives and that includes how we spend our money. A new survey from Capterra has found 55% of Australians are comfortable with the idea of a completely cashless society while more of us have been relying on mobile wallets to make payments since the start of the pandemic.
The results are not surprising. To help stop the spread of COVID-19, many retailers are asking customers to use contactless payments rather than cash and others are refusing to take cash at all.
The number of Australians using mobile wallets, which allow you to make contactless payments using your phone, has grown since the pandemic began. Capterra found that 10% more people are now using mobile wallets, and of those that added a mobile wallet to their phone during the pandemic, 98% plan to continue using it.
ATM withdrawal figures from the Reserve Bank of Australia (RBA) have also found a significant drop since the pandemic began. The number of cash withdrawals at ATMs fell to just over 24.8 million in May from over 43.3 million withdrawals in January. People are also taking out less cash: in May, we withdrew $7 billion, down from over $10 billion in January.
The Capterra survey, which talked to over 1,000 Australians, found that health was the driver towards cashless payments. One-third said avoiding the need to handle money or touch Point-of-Sale (PoS) terminals was an advantage of cashless payments, while 28% said faster payments were a benefit. Reducing the risk of infection was also listed by 38% of respondents as their reason behind switching to cashless payments.
Will the pandemic make Australia cashless?
While cashless payments are growing in popularity, it's unlikely to make Australia a completely cashless society. Over 55% of respondents said they would feel comfortable with a cashless future but 20% said they would always need to carry some cash.
Australians have been quick to adopt new payment methods such as mobile wallets but not everyone is in a situation where this is a viable option. Older Australians and those who are homeless are frequently cited as examples of people who rely on cash. While some cashless payment methods have been developed to facilitate charitable giving, these are not catch-all solutions.
Capterra's survey also found stark differences when looking at who in Australia was adopting cashless payments and mobile wallets. Those earning a higher income are more likely to adopt these digital payment options, the survey found.
Half of low-income earners (<$25,000 p.a.) said they have a mobile wallet installed on their phone compared to 69% of high-income earners (>$101,000 p.a.). Those on lower incomes said using cash was easier to budget while those on higher incomes cited the same reason for using digital payments.
Accepting cashless payments is also more difficult and costly for retailers. Businesses are required to invest in a POS terminal that can accept contactless payments as well as pay card providers a percentage of each purchase. This may be easy for some businesses to implement but is unrealistic for others.
Should you switch to cashless payments due to COVID-19?
The World Health Organization (WHO) has not advised against using cash. However, they did insist on using proper hygiene when handling cash.
"[...] you should wash your hands after handling money, especially if handling or eating food," said a WHO spokesperson.
According to this advice, it's up to you whether you decide to switch to cashless payments.
When considering whether to make the switch, think about the stores you frequent and whether contactless payments are always accepted. You should also see the payment options available to you (Apple Pay, Google Pay and Samsung Pay) and decide whether this will be a suitable mobile wallet for you. For example, not all banks are available on Apple Pay.
Find more information to help you through the pandemic in our coronavirus hub.