With the continuous development of technology and digital payment technology, we seldom carry cash when we go out nowadays. When we need to purchase, we can just take out our mobile phone and choose to scan the code to pay.
In the wake of the global COVID-19 epidemic, contactless payment has become the preferred method for many people.
According to Fidelity Information Services, which recently released its sixth annual Global Payments Report, predict:
By 2024, just 2.1% of retail transactions in Australia will be in cash,
In 2020, it will be 8.3 percent.
Globally, the proportion of cash transactions in 2020 was 20.5 per cent.
the Fidelity Information Services report says,
Australia ranks fourth on the “dislike of cash” list, behind Sweden, Denmark and Hong Kong.
The COVID-19 has accelerated the decline in the proportion of cash transactions:
From 2019 to 2020, the proportion dropped by 4.4 percent.
According to previous RBA data, in November 2019 — before the COVID-19 outbreak — cash accounted for 32% of payments. The RBA has found that contactless payments are becoming increasingly popular in consumption under 10 knives. Australians have long been enthusiastic proponents of cashless payments. The spread of digital wallets and smartphone payment apps could make old notes and coins a thing of the past.
Australia is expected to reach a cashless payment rate of 98 per cent by 2024 as the outbreak accelerates the growth of payment methods such as Tap and Go.
The latest figures from financial payments giant FIS predict Australia’s cash payments will fall to 2.1 per cent of all transactions over the next three years.
Back in January, the RBA began considering a digital economy, according to The Australian. According to the RBA, its internal “innovation hub” is considering whether a blockchain-based digital currency called the Central Bank Digital Currency (CBDC) could be used to speed up large money transfers.
“Australian consumers are seeing a new dawn in business, as they are paying, consuming and interacting with businesses in modern ways,” said Phil Pomford, general manager for Asia Pacific at Fidelity Information Services’ (FIS) World Payments Mercanter Solutions division, according to News 9. “As Australia moves towards a largely cashless payments market, we must focus on financial inclusion. Significant parts of the economy will continue to rely on cash, such as charitable donations and restaurant tip jars.” Phil Pomford said.
Australia’s e-commerce market is expected to grow from AUD 47 billion in 2020 to almost AUD 70 billion by 2024, with many Australians preferring to use debit cards for online shopping rather than cash in stores.
The fastest growing online payment methods are Buy-Now-Pay-Later services such as Afterpay, which are growing at 32 percent a year and are expected to account for 20 percent of the e-commerce market by 2024.
The Australian Taxation Office has repeatedly said publicly that it is cracking down on the “black economy”, or the practice of earning income through “cash on hand” work, which is done by people who never pay income tax.
In 2019, the Australian Taxation Office received more than 230 reports a day, or 15,000 in a year, about people evading tax through cash transactions.
One of the biggest concerns is that employers are paying workers cash to avoid spending such as pensions.
These tax problems are clearly easy to solve as Australia shifts to a cashless payment market.
In March, Australian tech company Gobbill also struck a deal with Chinese payment technology group Alipay to introduce contactless payment in Australia. Australian retailers are also turning to mobile payment methods following the release of COVID-19 regulations, The Australian reported. In addition to the cashless schemes introduced by banks and shopping centres, the Australian government has drafted a Money Bill 2019 regulation banning cash transactions in excess of AUD 10,000. On the one hand, the law helps to eliminate money laundering offences and, on the other hand, it encourages people to pay cashless.