Are we ready to be cash-free?

Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.

When was the last time you paid for a purchase with cash? Chances are that it was a while ago. According to the Reserve Bank’s (RBA) most recent data, in 2022 cash was used for just 13% of consumer payments, down from 27% in 2019.

As the graph shows, every sector has experienced a downturn in the use of cash. Covid may have hastened the decline, but cash was starting to fall off a cliff long before the pandemic.

Amanda Rose, chief executive of advocacy platform Entrepreneurial & Small Business Women, believes the decline in the use of cash is seeing small businesses hit with high merchant fees and the risk of losing business when payment systems are down.

“This premature pull towards a cashless society will hit business owners at a time when profit margins are already thin,” says Rose.

“A large segment of Australian customers, such as elderly people, still use cash – going cashless means businesses and customers both stand to lose.”