Many are familiar with the phrase “cash is king". But that saying might be a little bit of out of date. Especially when you consider that debit and credit card transactions -- now make up more than three-quarters of all payments in Australia. And while major banks are predicting Australia will soon become a cashless society ... There are many who argue that getting rid of physical money -- and cheques -- will cause great harm to communities across the nation. Brad Kelly, the managing director of a consultancy called "payment services" says with around 13 percent of transaction made in cash, we already live in a vastly cashless society.
Category
📺
TVTranscript
00:00I think arguably we're already cashless. So at the moment we're sitting about 13% of transactions
00:07done in cash. Whether it'll never get to completely zero, I think that's ridiculous. But at what
00:11point are we cashless? Maybe it's 10%, maybe it's not. So look, we're already there. We've
00:17taken cash and replaced cash with debit cards. So there's now 47 million debit card transactions,
00:23$47 million cards at $50 per transaction. That's soaked up most of the cash usage. There's
00:32also other payment methods we use, but that's essentially what's happened.
00:35I think the banks want Australia to become even more cashless. I'm not sure what your
00:40views are on whether or not that's a good thing. I mean, the banks argue that it's just
00:43too expensive to maintain that supply of cash, especially when you have to pay contractors
00:49to protect the cash and transport it great distances to the regions.
00:54Look, I think there's a number of arguments in this. And one of them is that we're now
00:59paying for debit card transactions through surcharges. So we've soaked up all the cash,
01:04moved it to debit cards. We're now paying for that. But now we've got to pay for cash
01:07as well. At a certain point, I think the banks are going to have to make a decision about
01:11what business they're in and what the shape of these businesses actually are. Because
01:15I'm of the view that at a certain point, maybe the payments market is something that
01:20we need to consider more of as a utility than something to make money out of.
01:24So at 13%, it's causing problems for the banks. And I'm not sure they'll get a lot of sympathy
01:30for that. But there has to be some change within their system so that we can get cash
01:34to people who still need it. And there's a lot of people outside the four walls of Sydney
01:39and Melbourne and Brisbane that rely heavily on cash. We can't all just expect everyone
01:44to just move to the beat of our drum because we happen to like cards. So there has to be
01:48some kind of way that we look after everybody.
01:50Absolutely. And I guess the question is, who bears that cost? I mean, ArmourGuard is now
01:56the last cash transport company. And they were crying poor not too long ago, and they
02:00managed to extract a $50 million bailout from the major banks and the supermarkets. I mean,
02:07what's to stop them from crying poor again and asking for more?
02:11Yeah, well, we're almost at the 12-month mark for that, because that was the threat
02:14over Easter, I think, which is one of the biggest. You've got Good Friday, Easter Monday,
02:18two public holidays and weekend in the middle, and then you say there's no cash. And that,
02:23you know, will that happen again? Maybe they'll go back for a second stab. I don't know. But
02:28this is a problem that's come about. Arguably, it's off the banks and ArmourGuard's own in
02:33making. And I won't make any friends for saying that. But, you know, they've created a monopoly.
02:38They've got the situation they've got. And now they're saying, oh, it's all too expensive.
02:42And Mr. Merchant or Mr. Customer, you're going to have to pay for it. I don't think that's
02:46necessarily reasonable.
02:47And Brad, the next one might be a little controversial for some people. But the Albanese government
02:52has confirmed checks will stop being issued by June 2028, which is really not that far
02:57away. And you've got the situation where a lot of young professionals probably have never
03:01even seen a check in their lives, or even a VCR or a cassette player. So, I mean, I
03:06guess it's becoming increasingly irrelevant checks as they are getting phased out. So
03:11what are your thoughts on this?
03:12Look, I haven't written a check for a number of years, and I've got a few years on you.
03:17But the reality is that consumers don't write checks anymore. And we've had we've had payment
03:22mechanisms like BPAY since 1998 or thereabouts. So we pay our bills either through cards or
03:28either through BPAY or some other electronic method. Where it's going to come into a problem
03:34is when you've got businesses that are heavily reliant on checks still. And the legal fraternity
03:38is one of those. And some real estate companies still still use checks. A lot of this is not
03:44out of stubbornness. It's out of legislation, because there are pieces of legislation that
03:48still say a check must be issued or that the payment mechanism is a check. I think that
03:53needs to be covered as well. Checks are very much on the decline. Every year, the numbers
03:57just dwindle and dwindle. And again, the same argument for cash is the less that we have,
04:02the higher the cost. That's fine. But with checks, there are alternative methods to pay
04:08between bank accounts. But we're not quite there yet for a like for like replacement.
04:13And I think that has to be addressed.