January 2nd 2025.
The past year has brought about significant changes in Australia's financial landscape, particularly in terms of cash and its role in our society. In a move towards a cashless society, banks have closed down over 900 ATMs and 230 local branches in the last financial year. Macquarie Bank made headlines when it became the first major bank to go completely cashless, only allowing customers to withdraw cash from ATMs without any fees.
This shift towards a cashless society has raised concerns about the future of physical money and whether people will still be able to use it with their own banks. Businesses have also jumped on the cashless bandwagon, with popular chains like Gloria Jeans going cash-free in some of their stores. However, just when it seemed like physical money was on its way out, the Albanese government made a surprising announcement about a cash mandate.
So, what exactly does this cash mandate entail? The government plans to require businesses to accept cash as payment for essential goods and services, such as groceries and fuel. However, smaller businesses may be exempt from this legislation based on their size, location, and ability to handle cash. Treasurer Jim Chalmers emphasized the ongoing importance of cash in our society, stating that while digital payments are becoming more prevalent, there is still a place for physical money.
But are we really using less cash? The answer is yes, but it's not the whole story. The Reserve Bank of Australia's annual report shows that they issued $3.6 billion in banknotes in the last financial year, which may seem like a lot but is actually only 40% of their typical amount. Surprisingly, the value of banknotes in circulation remains high at over $100 billion, equivalent to 4% of GDP. And while there was a slight decline in the number of banknotes in circulation, the number of $100 bills actually increased by 1%.
The Royal Australian Mint's annual report also reflects a significant drop in the production of coins, with a 90% decline in the last decade. This decrease is due to banks ordering fewer coins, but ATMs are still being used regularly, despite there being fewer of them compared to seven years ago. In fact, Australians withdrew over $100 billion from ATMs in the last financial year.
Cash advocate Jason Bryce believes these figures demonstrate that cash is still very much in demand, as people continue to withdraw and use it for their transactions. However, as the government plans to phase out cheques by mid-2028, the use of physical money may continue to decline.
In addition to the cash mandate, the government also announced plans to crack down on card surcharges, a source of frustration for many customers. These hidden fees, which cost Australians around $960 million per year, will be eliminated for debit card payments, with a potential ban in place from January 2026. The Australian Competition and Consumer Commission (ACCC) will receive $2.1 million in funding to address excessive surcharges and reduce payment fees.
Overall, the landscape of payments in Australia is rapidly changing, with a move towards a cashless society and increased use of digital payments. However, the government's cash mandate and plans to eliminate card surcharges show that physical money still has a place in our society. As we continue to navigate this shift, it's important to consider the needs of all individuals, including those who still prefer using cash for their transactions.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
[Generative AI is experimental.]
