Mystery: cashless transactions and demand for banknotes hit record highs at same time
AS Australia enters its first recession since 1990, businesses are looking for whatever boost they can to remain afloat. Unfortunately for cash users, businesses are turning to cheap and secure cashless payments to cut costs.
Eftpos, Australia’s debit card system, announced they are rolling out more cashless payment technology to support businesses dealing with the recent increase in card payments.
One of the latest technologies is Eftpos mobile transactions. This technology allows people to use their mobile phone to make payments instead of using a physical bank card. Mobile transactions in Australia have increased by 400 per cent since July 2019.
To meet this demand, Eftpos is offering a low-cost and secure cashless payment platform for Australian businesses during COVID-19 and recovery. The technology can cut costs for businesses, which may be essential for their survival.
However, it is important to remember that the Reserve Bank has said that Australia will not become a cashless society as long as cash is still in demand. In fact, in February 2020, a sharp increase in the demand for cash withdrawals caused the Reserve Bank to increase their stock of banknotes by $11 billion.
This is likely to be an indication of cash being regarded as a secure store of value. People were likely very worried about banks collapsing during these uncertain economic times.
However, this is unlikely to be a sign of the return of cash payments as the default payment method. These large cash withdrawals have not been spent. Cash is being stashed in safe deposit boxes, under mattresses and in socks.
The demand for cash has become less intense more recently.
Although cash is not going away, more and more businesses may ban cash payments or encourage customers to pay cashless.
However, there are also still plenty of businesses with signs up saying that card payments are only available for purchases over a certain limit.