The worrying sign that Australia could become completely cashless in just two years

Australia could be ‘technically out of money’ within three years, with cards or digital payments now accounting for three-quarters of small purchases.

Before the pandemic in 2019, just over half of all in-person, daily transactions under $10 were made with a card.

But in three years that rose to 73 percent for purchases of things like a cup of coffee or gelato to take away, according to a new Reserve Bank report released on Monday.

“The shift from cash to lower value payments reflects the increased adoption of contactless electronic payments during and after the pandemic,” the report said.

“As Australian consumers increasingly choose to pay electronically, the trend decline in the transactional use of cash has continued.”

Financial expert Sarah Wells predicted that by 2026, less than five percent of all personal transactions would be made in cash – compared to 16 percent today.

Financial expert Sarah Wells predicted that by 2026, less than five percent of all personal transactions would be made in cash – down from 16 percent today

“We are entering what we would call a ‘technically cashless society’ and what I mean by that is that somewhere between 90 and 95 percent of everyday, ordinary transactions are done without cash,” she told Daily Mail Australia.

‘We are really moving towards a society that is not dependent on cash.’

Nicole Pedersen-McKinnon, author of How To Get Mortgage Free Like Me, predicts that within two years, only two percent of committed consumers will use cash for every transaction made in a store – down from five percent today .

“It’s scary how quickly we seem to adapt to paying for even small things with a card,” she told Daily Mail Australia on Monday.

“The speed of the shift towards cash disappearing is accelerating, but there are segments of the population who will never give up their cash and that will be a painful and potentially expensive process.”

Baby boomers and older Generation

The RBA report also noted that consumers who still used cash were more likely to use banknotes for $5, $10, $20, $50 and $100 transactions.where change or coins are less likely to be needed’.

Ms Well said it was harder to save money with tap-and-go.

“It’s not the $900 purchases that are getting us in trouble; it’s the hundred $9 purchases; “If we do a lot of small transactions, we don’t quantify them, whereas if we had cash in our wallet and we spend $10 here, $20 here, we say, ‘Oh, wow, where’s all that money gone?'” said she.

While 80 percent of cash-strapped users say they would be ‘majorly inconvenienced’ cash became difficult to use or access.” Those who still used cash for purchases cited privacy and security, and family and budget reasons.

A significant minority, or nearly 40 percent, of cash-heavy users cited privacy, security and trust, according to the Reserve Bank discussion report by Tanya Livermore, Jack Mulqueeney, Thuong Nguyen and Benjamin Watson.

Ms Wells said women fleeing domestic violence and Australians suffering from elder abuse needed access to cash for their safety as coercive family members could keep track of their spending.

“Think about the small percentage of the population that gets caught up in those unintended consequences whose outcome could be catastrophic if forced into a digital landscape,” she said.

Credit monitoring companies such as Experian, Illion and Equifax provide data on individuals’ spending behavior to banks and phone companies before approving a loan or plan.

Ms Pedersen-McKinnon said those who paid cash only were better able to budget and also had more privacy.

Nicole Pedersen-McKinnon, author of How To Get Mortgage Free Like Me, predicts that within two years, only two percent of committed consumers would use cash for every transaction made in a store – down from five percent today

Before the pandemic in 2019, just over half of in-person, daily transactions under $10 were made with a card. But in three years that rose to 73 percent for purchases of things like a cup of coffee or gelato to go, according to a new Reserve Bank report released on Monday (pictured is a Harris Farm sign in Sydney)

“Fintech and existing mapping and tracking technology build a picture of your spending habits and absolutely contribute to how and how often you are targeted for more spend,” she said.

“And all the way down to whether or not you’ll be approved for loans and even phones.

“There’s a whole web that’s a snapshot of your money self that you need to make sure you stay absolutely squeaky clean when it comes to electronic and card transactions.

‘With cash you are essentially out of the picture.’

The 10-hour Optus outage on November 8, which lasted from 4am to 2pm, also highlighted the need for physical cash if customers were unable to pay small businesses digitally.

“We always have to have an analogue solution in a digital world because things are going to happen,” Ms Wells said .if you want to more info then click here…..