Australians Using Cash for Higher-Value Payments
An analysis of payment trends in Australia conducted by Bankwest shows that, although the number of cash transactions has dropped between 2020 and 2022, their average value has soared, suggesting that people are using cash less often, but for higher-value transactions than previously.
We’re unlikely to see physical cash disappear any time soon, as it remains a robust and stable payment method, with no reliance on the internet or power, and is important for less-digitally literate customers.
The volume of cash and cheque deposits at Bankwest branches fell 45 percent from May 2019 (pre-pandemic) to May 2020 and have held steady since, presently around 46 percent lower than pre-pandemic levels. Withdrawals also fell, and are currently 42 percent below 2019 levels.
In an interesting countertrend, the value of cash and cheque deposits has risen by 13 percent in the same period, while the value of cash withdrawals has increased by 30 percent. Bankwest concludes its customers are making fewer cash transactions, but using it for higher-value payments.
The increase in the value of physical cash and cheque usage is interesting and indicates physical money has potentially become a niche payment method that is used for quite specific and high value purposes. That could include... withdrawing large amounts to pay for trade services or whitegoods in cash, but our everyday transactions now appear more likely to take place digitally.