The idea of a cashless society used to seem wholly unrealistic. However, in the wake of the global pandemic and as Fintech becomes the norm, the dawn of the cashless society is gathering pace.
What do we mean by a cashless society?
Imagine a world that is devoid of paper banknotes and coins. Instead, all payments are made through mobile banking, credit and debit cards, and essentially any form of digital currency. This, in simple terms, describes a cashless society. This type of society grows more realistic for us when we examine countries who model this lifestyle, such as Sweden, which is often described as the most cashless society in the world.
Swedish citizens were incorporating digital payments into their lifestyle well before the COVID-19 was ever heard of, but as in most countries the pandemic accelerated the decrease of cash use even further with the country becoming almost entirely cashless. But what does this mean for Australia?
Is Australia close to becoming a cashless society?
It may surprise you to learn that Australia is well on its way to becoming a cashless society also, a feat which has been propelled forward by COVID-19. According to the Australian Broadcasting Corporation, in the space of ten years, cash went from being the most popular form of payment to only being used for 25% of transactions.
This has been due to a number of factors. For one, the Australian Federal Government recently proposed laws which would ban cash payments of over $10,000, also threatening the possibility of two-year jail sentences for Australians who broke this rule. This change has also been driven by the rise of digital currencies, which once looked like a distant reality, but are now being considered by many global governments as not only a genuine financial product but an extremely useful one.
There are varying estimations of when Australia will become completely cashless, but there is no denying that this will inevitably take place. For example, Research and Markets; a leading global market research firm, believe that Australia has the potential to become the first cashless society in the Asia-Pacific by 2022. The Commonwealth Bank, however, estimates that it may take slightly longer, possibly until 2026. Either way, neither of these predictions are very far away.
What’s stopping us?
Quite simply, cash is still a key method of payment for many Australians, so there are still steps that must be taken before society can become completely cashless. This largely includes older Australian citizens and those on lower-income wages. In fact, as of April 2020, the Australian Banking Association claimed that there were still 500,000 of their customers without a debit card linked to their bank accounts.
This means that a significant number of people in Australia are still unable to make payments online, presenting a major obstacle to a cashless society. In response to this claim, the ASA has stated that banks would attempt to issue a record number of VISA and MasterCard debit cards and assure their customers can start to begin to make safe online payments.
There are still some hurdles to cross before Australia becomes an entirely cashless society, but the prospect is definitely closer than we might think.
Want to learn more about the future of digital currencies? Read more about Qoin here.