Visa Embedded Lending June 2024 Banner

Australia’s Mobile Wallet Use Surges 12,000% Amid Cash Shortage

Australian currency

Paper money use is reportedly waning in Australia amid troubles at its top cash supplier.

Linfox Armaguard, which moves 90% of cash to the country’s banks, ATMs and retailers, is fighting to stay afloat, Bloomberg News reported Sunday (June 2). The company’s uncertain fate has sparked fears that people and businesses may have to do without physical currency.

“It’s a significant moment for cash use in Australia and may push the nation into becoming cashless,” Chris Vasantkumar, a lecturer in anthropology at the Macquarie University School of Social Sciences who focuses on cash and cashlessness, told Bloomberg.

“It’s clear the current model of getting cash from the places where it’s printed to the places where it’s used, doesn’t seem to be sustainable.”

The report notes that Australians are increasingly hoarding paper money, according to Reserve Bank of Australia data, as people seek ways to guard against payment-system outages and natural disasters.

At the same time, the value of mobile wallet transactions in Australia hit $63 billion ($93 billion in Australian dollars) in 2022, up from $746 million Australian in 2018, a more than 12,000% jump, the report said, against citing data from the country’s central bank.

Meanwhile, recent research by PYMNTS Intelligence finds that a broad range of consumers across income levels and ages are displaying a preference for paying for purchases with cash — as well as debit cards — likely in hopes of better managing their debt levels.

“Paying for items with cash and debit cards can reflect a deeper concern about financial stability,” PYMNTS wrote last week. “And the fact that cash and debit card activity is on the rise for younger and lower-income consumers — up 34% from last year for groceries alone — suggests these two groups are being especially budget-conscious right now.”

Meanwhile, digital wallet usage is also on the rise in the U.S., though the numbers vary by generations, with 79% of Gen Z consumers saying that they are avid digital wallet users, as are 67% of millennials.

The numbers dip the higher up you go: 62% of millennials use digital wallets, as do 44% of Gen Xers, and just 28% of baby boomers and seniors.

“But age is just one yardstick to judge digital wallet use,” PYMNTS wrote. “How much money people earn each year also appears to shape their interest in digital wallets.”

For example, 55% of people who make $100,000 or more per year are digital wallet users, while that number drops to 41% for people who make $50,000 or less annually.