What are the dangers for a cashless society? Jack Han reports.
January 20, 2010
Australia is moving closer to becoming a cashless society, according to new figures that indicate ATM cash withdrawals have dropped to their lowest rates in six years.
In 2009, debit card ATM withdrawals per account fell to 2.39 a month, from 2.55 in 2008, according to debit and credit card analysis firm MWE Consulting.
Mike Ebstein, managing director at MWE Consulting, says cash transactions could be a thing of the past despite the company’s finding of the average ATM withdrawals rose by around 3 percent to $179 last year.
Currently, MWE estimates that of all the transactions in Australia, about 65 to 70 percent are still made in cash. Most commonly, cash is used for transactions below $25.
"We have been seeing a reduction in cash transactions on credit (card) for a long time . . . but what is significant is this (debit card) reduction, which accelerated in the last year," says MWE managing director Mike Ebstein.
"I think that's a sign that Australians are beginning to move away from cash as their staple payment product."
This trend is expected to increase this year with the introduction of contactless credit and debit cards, which aim to replace small cash transactions with electronic alternatives. They work by scanning your card and remotely reading its details with no PIN number of signature required.
So will living in a cashless society be such a bad thing? Contactless card users are able to enjoy a variety of benefits such as never needing to carry change or withdraw money and shopping has become more convenient and efficient at the check out.
In fact, by only using cards, many Australians are able to take advantage of reward programs through their smallest purchases, and accrue shopping savings over the year. For example, instead of withdrawing $200 from an ATM for a transaction, many credit card rewards can discount around 5 to 10 percent from the purchase price of particular items when using the credit card.
Relying on cash has its benefits however, as concerns mount about the new contactless cards’ vulnerability to credit card skimming, which is the theft of card information through illegal scanning devices.
As our wallets become lighter it’s more important than ever to balance convenience with safety. Compare credit cards online to make sure your card has all the features you need to prevent skimming, while offering you the most affordable interest rates and fees. After all, if a card is all you will be carrying for your purchases, you need to make sure that it’s the best for you.