Cashless Banks Raise Concerns in Australia
Jun 3, 2024
Australia’s Macquarie Bank is going fully cashless, with critics raising concerns about the resilience, privacy and security of digital-only transactions.
News.com.au reports that the bank has committed to ‘a fully digital model’ and in addition to phasing out cash and cheque services, it has also stopped offering phone banking. It has additionally ended an agreement with National Australia Bank (NAB) that enabled its customers to make deposits and withdrawals via cash and cheque at NAB branches.
While Macquarie claims digital payments are ‘safer, quicker and more convenient’, concerns have been raised, with Macquarie University lecturer Dr Chris Vasantkumar pointing out: ‘some folks—indeed some societies—have serious concerns about lack of privacy’ and, despite the best efforts of the financial sector, cash is ‘unlikely to go away completely’.
One person’s transparency is another person’s surveillance. How much information about our economic behaviour are we comfortable giving up?
Dr Angel Zhong, an associate professor of finance at the Royal Melbourne Institute of Technology, also believes that while cashless payment may become the dominant means of payment, ‘[that] does not mean cash as a legal tender will lose value of disappear from society.’
[People] may worry about their transaction data being tracked and analysed by corporations or government agencies. [Also,] digital payment systems can sometimes be vulnerable to technology outage, hacking or fraud.
Arguments around digital transactions reducing crime are also challenged by evidence that today’s criminals operate cashlessly, and are developing a range of ways in which to exploit digital transactions. Researchers for UK-based We Fight Fraud say the modern criminal prefers ‘socially-distanced bank transfers, online fraud and illicit sales via social media.’ The proceeds of illegal activities are increasingly being laundered via bank transfers, with ‘fintech organisations and companies being used to facilitate fraud.’
On an individual level, the critical issue is personal choice. People should be able to select the best payment option on a transaction-by-transaction basis, taking into consideration who they are paying and what they are buying, as well as their personal circumstances and priorities. On a societal level, resilience is a key consideration, with cash operating 24/7 and offline, versus digital payments that are vulnerable to infrastructure outages arising from issues such as IT system faults, local power outages or disasters such as wildfires or flooding.
Ensuring cash remains accessible and usable will ensure those who prefer or depend on it are included within the economy, and those who prefer cashless always have a backup for occasions when digital options fail.