- No small change: moving to a cashless society is the next step
- Not making cent: why the humble five cent coin is dommed
Australia's unstoppable march towards a cashless future will save billions of dollars and force governments to abolish outdated red tape, the Assistant Minister to the Treasurer, Alex Hawke, says.
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"Australia is well on the way to becoming a cashless society," Mr Hawke has written in an opinion piece for Fairfax Media.
"Like the change to decimal currency 50 years ago, the move to a cashless society will be a fundamental shift in the way Australia's payment system operates."
Mr Hawke urged that government must keep pace with this consumer and business-driven shift in the way Australians do commerce.
"In the face of this change, the government will need to be nimble, removing obsolete regulations and ensuring that innovation isn't stifled by ill-considered interventions," he said.
From 2007 to 2013, cash dropped from 70 per cent to 47 per cent of transactions. In the last three years, the demand for coins has dropped 25 per cent.
"On the 50th anniversary of decimal currency it's only natural to consider what the next 50 years will bring for the Australian dollar, especially as new payment technologies become ever more common," Mr Hawke says.
Last week, Mr Hawke and Ross MacDiarmid, chief executive of the Royal Australian Mint, predicted the five cent coin will be abolished or die off naturally in the near future.
The demand for banknotes is still growing. As of June 2015, there were 1.3 billion in circulation. The total value of $65.5 billion was up 8 per cent from the year before - higher than expected.
This was largely driven by production of the $100 note, which increased 11 per cent and has jumped significantly since 2012.
The Reserve Bank - responsible for banknotes - is evidently backing their future, currently building a new, state of the art printing facility in Craigieburn, Victoria.
Mr MacDiarmid says that, while hard currency is under threat from new technology, "there will always be a need for coins and notes."
He observes that Europe has seen a 5 per cent increase in demand for coins, something not occurring in Australia although there has been a small and mysterious upturn this year.
In a climate of economic uncertainty, there is also concern about the security and lack of anonymity of new innovations. Mr MacDiarmid sees a correlation between this and a preference for coins and notes that people can hold in their hand.
Some countries are leading the charge towards cashless systems. The Danish government has proposed removing the obligation for businesses to accept cash payments and in Sweden hard cash represents just two per of the economy as card and mobile payments take over.