October 22, 2023

‘Cash no longer king, but it’s not dead’: Australians follow the money to digital wallets

By Shane Wright
October 22, 2023 — 12.05pm
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ATMs and EFTPOS machines are disappearing across the country as Australians move to digital payment systems, the Reserve Bank revealing the use of cash has halved, led by older people and those living in regional areas.

In the past financial year, the value of cash circulating in Australia fell 1 per cent – the biggest drop in two decades – as the number of every note bar the $100 fell.

The number of ATMs and EFTPOS outlets are falling as Australians reduce the amount of cash in their wallets.Credit: Generic

The crash in notes is feeding directly into a decline in access points for those who want to use cash, and authorities say people in isolated or regional areas may find it increasingly difficult to put money in their wallet.

The Reserve Bank, in its annual report, said the use of cash for in-person transactions had fallen from 32 per cent in 2019 to just 16 per cent last year.

Across all demographic groups, the use of cash had fallen, although the biggest drop was among those who had traditionally been large cash users such as the elderly, those on lower incomes and people in regional areas.


According to the RBA, in the 2022-23 financial year it received more notes from commercial banks than they bought from the Reserve. There was a 4.2 per cent drop in the value of $50 notes in circulation and a 2.4 per cent drop in $20 notes.

Only the $100 note increased in circulation but the 2.4 per cent lift was well short of its long-term average growth of 7.3 per cent.

Australians’ changed shopping habits, higher interest rates and a reduction in precautionary savings were all contributing to the decline in cash.


“The use of physical cash for day-to-day transactions has been declining for many years, as consumers switch to digital payment alternatives. The COVID-19 pandemic further accelerated this trend,” the RBA said.

The Reserve issued $3.1 billion worth of notes in the 2022-23 financial year, about a third of its normal level.

The reduction in cash is being reflected in the falling number of ATMs and EFTPOS outlets.

Data collated by the Australian Prudential Regulation Authority shows the number of ATMs fell another 11 per cent over the past year to fewer than 5700.

Since mid-2017, ATM numbers have crashed by 59 per cent. The biggest falls have been in the ACT and Western Australia (down 65 per cent in each jurisdiction), while they have more than halved in NSW (58 per cent), Victoria (54 per cent) and Queensland (61 per cent).

The number of EFTPOS outlets has also dropped, edging below 700,000 this year. Since mid-2017, about 100,000 EFTPOS points have gone.

RateCity research director Sally Tindall said while most banking services had moved online, there were still people who wanted cold, hard cash.

“Cash is no longer king, but it’s not dead in the water either,” she said.

“RBA statistics show over $8 billion is withdrawn from ATMs across the country every single month, confirming we’re not a cashless society just yet.”

Despite the fall in cash usage, there are still almost 2 billion banknotes in circulation.

Advances in banknote technology, as used in the new $50 note, have helped push counterfeits down to their lowest rate in 20 years.Credit: Reserve Bank of Australia

The Reserve Bank revealed it had processed 8900 claims and made $14.3 million in payments to people who had brought in damaged banknotes.

Of those, 130 claims worth $9.6 million were for notes damaged during floods that swept across much of eastern Australian in 2022. Most of the notes came from businesses and financial institutions.

The decline in cash, and improvements in the quality of the notes in circulation, is helping one age-old problem with notes. The RBA said the level of counterfeiting fell to its lowest level in almost 20 years in 2022-23.

The Reserve said almost 10,000 counterfeit notes, with a nominal value of $800,000, were detected. This is a counterfeit rate of about five counterfeits per million notes in circulation, well below the 20-year average of 12 counterfeits per million.

According to the Reserve, the drop in counterfeiting reflected strong policing and the dominance of the bank’s new generation of high-security banknotes.

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Shane Wright – Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.Connect via Twitter or email.


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