Cash-fed economies getting squeezed by cashless trend

27 February 2017

The trend in ‘going cashless’ is having a negative impact on tradies, waiters and charities who rely on physical over digital dough, according to new research unearthed by ME.

Of the 61% of Australians who reported a growing preference for digital cash, large numbers also said their move away from physical cash had impacted their generosity.

What impact has going cashless had on how often you % less often
1. Pay for services with cash in hand i.e. tradies 51%
2. Tip waiters 45%
3. Donate to charity(s) on the street  44%
4. Pay buskers or street entertainers 42%
5. Give money to less fortunate people than you e.g. homeless 42%


      (Base: Transaction account holders who are using less physical cash than 5 years ago and have exercised the specific activity listed above).

“Inevitably, there will always be winners and losers as technology advances our ability to go cashless,” said ME Head of Deposits and Transactional Banking, Nic Emery.

“Consumers are benefitting from tracking their spending and innovations that make their lives easier such as apps that pay for coffee or parking,” he said.

“But there are also losers in the growing preference for digital money, including those who in the past have relied on gratuities and cash donations like waiters and charities.

“The move to digital money may also exclude some Australians as ‘going cashless’ requires an active bank account, which many of our poorest are unlikely to have.”

Emery said it is always useful to keep some cash on hand, especially if you like to donate for philanthropic reasons.

He said some on-street charity fundraisers are now broaching the world of contactless payments.

According to ME’s study with 2,000 transaction account holders, while 61% said they’re using less physical cash than five years ago, 39% are using the same if not more physical cash despite the influx of innovations such as Tap & Go and online banking.

According to a report by Fung Global Retail & Technology, nine of the top 15 ‘most digital-ready’ countries are in Europe. It predicts Sweden could become the world’s first completely cashless society by 2030.

 

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Note about the survey: Survey conducted via RFi Group in December 2016 using an online survey method. Survey completed by 2,000 transaction account holders.