In Australia, cash and card-based payments have long been playing tug-of-war. In 2017, however, the balance seems to be tilting away from cash with contactless card-based payments powering close to a third of POS transactions.
So, is this the beginning of the end for cash Down Under? As it turns out, not really. Australian consumers continue to rely heavily on cash, at least when it comes to small-value transactions.
In 2016, more than 60 percent of small value transactions ($10 or less) were paid in cash, according to the Reserve Bank of Australia. Additionally, cash continues to be the top payment method for consumers over the age of 65, who use it to pay for more than half of their transactions. Even among tech-savvy millennials, who are driving the shift toward digital payments, cash continues to power a third of their transactions.
Collectively, Australians used a whopping $143 billion in cash last year — more than $103 billion of which came from the country’s vast network of ATM terminals.
At 133 ATMs per 100,000 people, the country has the second highest penetration of ATMs in the Asia-Pacific region, after South Korea, according to the brand new PYMNTS.com Global Cash Index™ Australia Analysis.
While cash faces the Outback Highway ahead, it seems positioned to continue to hold a key place in Australian consumers’ wallets.
Some key takeaways from the new PYMNTS.com Global Cash Index™ Australia Analysis:
- As of 2015, cash usage in Australia as a percent of its gross domestic product (GDP) stood at 11.7 percent.
- ATM withdrawals made up 8.7 percent of overall GDP, whereas OTC withdrawals represented 3.3 percent.
- Since 2013, the median value of cash transactions has remained stable at $12.
Cash Down Under, can you feel the transaction thunder?
The PYMNTS.com Global Cash Index™ Australia Analysis also features an interview with Raghavendra Bhat, Australia and New Zealand (ANZ) Banking Group’s head of technology.
Bhat said that even though Australian consumers tend to prefer credit and debit cards for making day-to-day payments, cash is often their hands-down choice when it comes to making small-value transactions. Use of cash for small-value transactions is particularly high among smaller businesses, which prefer cash to avoid paying the interchange fees, he said.
And, while the country of 24 million citizens has embraced contactless tap-and-go payments, the country has a significant way to go before it could, perhaps, become cashless.
For a radical payment shift to happen, Bhat said, digital payments need to be incentivized for all players in the value chain. Aside from that, he said, an overhaul of policy framework will be crucial to the success of digitizing payments. Until that happens, cash will continue to maintain its position as an imperative payment instrument in the country.
To read the story and check out the complete Australia cash analysis, download the report.
To download The PYMNTS.com Global Cash Index™ Australia Analysis, please click below…
The PYMNTS.com Global Cash Index™, a Cardtronics collaboration, focuses on the use of cash for making payments and as a payment method that equally plays a role with cards, checks, direct debit and other methods of settling up between consumers and businesses. Unlike most reported estimates of cash, our proprietary data analysis focuses on the use of cash for making payments rather than hoarding.