Paying with your phone and watch is a step towards the future, as the Reserve Bank’s Philips Lowe cites how speculation is shifting.
Pulling out a five, ten, or fifty from your wallet may not be what we do in five, ten, or fifty years from now, as cashless becomes more concrete than the pure speculation it once was.
At a recent conference, the Reserve Bank of Australia’s Philip Lowe spoke on how we’re now shifting beyond the mere idea of a cashless society to one that now has substance, but that there’s still work to do.
Addressing the 2018 Australian Payment Summit, Lowe said a “turning point has been reached”, citing that “it is now easier than it has been to conceive of a world in which banknotes are used for relatively few payments”.
Lowe’s address to the summit points out how the shift is likely to affect the Australian handling of money in general, reducing our reliance on the ATM from needing to visit one 40 times a year a decade ago, falling to 25 times a year today, with the visits likely to fall further.
Alongside the reduced usage of ATMs is the reduction of cash for payments, as electronic transactions grow. Lowe’s data suggests that, on average, Australians are making almost 500 electronic payments annually, compared to around 100 in 2000.
At the same time, cheque usage has dropped significantly, falling from roughly 45 cheque payments per person in the mid-90s, and sitting at around three per person today.
Lowe also addressed the functionality, reliability, and safety of electronic payments, looking at a payment system that was available all of the time, but that still had room for improvement.
“We all need to do better here,” said Lowe. “As we rely less on cash, outages affecting retail transactions can have a significant impact on businesses and individuals. So continued effort needs to be made by all participants in the payments system to reduce operational problems.”
“While I have talked about a near cashless payments system, I want to emphasise that we don’t yet envisage a world without banknotes. The RBA is committed to providing cash consistent with demand by users and to support its distribution. Our development of the Next Generation Banknote series is a clear commitment to ensuring that cash continues to have public confidence and to meet the needs of the community.”