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  • L Misthos and M Bacina

RBA report reveals reducing cash use in Australia

The Reserve Bank of Australia's (RBA) Bulletin for June 2023 indicates the changing payment methods in Australia, with a particular focus on the declining use of cash payments by consumers.

The Reserve Bank's 2022 Consumer Payments Survey provides insights into the spending habits of Australians. Cash's share of in person payments in Australia has more than halved from 27% in 2019 to 13% in 2022, cash's lowest ever usage rate. Card payments, specifically debit cards, have continued to soar, becoming the dominant form of payment.

In 2022, card payments accounted for 76% of all payments in Australia. Debit cards account for half of all payments, with credit cards making up the rest. Recently embattled 'buy now pay later' services make up only a small share of consumer payments while cheque usage has further declined, with news breaking that cheques will be completely phased out by 2030.

Since the RBA survey was first commenced in 2007, the use of cash in the Australian economy has continually dropped, even for low value purchases. In 2007, cash still accounted for 69% of all transactions while cards sat at a relatively small 26%.

The report comes at a transformative time for Australia's payment landscape, with Treasury revealing a strategic plan to update Australia's payments system. Although Treasury considers fiat currency will always be relevant, the strategic plan notes the potentially transformative role of digital currencies, such as Central Bank Digital Currencies (CBDCs) which are the subject of pilots around the world.

The dramatic shift from a once cash-based society indicates a growing reliance on new technologies to facilitate ease of payments and shows how powerful payment providers and banks have become as essential utilities within the economy. The report also underscores the rapid digitization of the Australian economy and the changing attitudes towards cash and electronic payments among Australian consumers following the RBA's continued progress on its pilot project for an Australian CBDC, which could work to further reduce Australian's use of physical cash.


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