Despite cheques being phased out, bank branches disappearing, and the use of cash declining significantly in the past two years, Australians are not yet ready to go completely cashless, according to new research from Waave, with seven in ten (71%) expressing concern about the shift to a cashless society, and two in five (41%) admitting they are ‘extremely concerned’.
Waave’s Cashless Future 2024 research which reveals that Australia’s financial services industry still has a trust gap to fill before consumers will embrace a fully digital economy. Not surprisingly, population groups who are less technology savvy, most affected by cost of living issues, and/or have poorer access to financial services expressed the greatest concern with the shift toward a cashless society, including Baby Boomers (82%), regional Australians (77%), and lower income households earning less than $100,000 (75%).
Over half (54%) of Baby Boomers admitted they are ‘extremely concerned’. By contrast, almost half (46%) of Gen Z are not concerned that Australia is moving towards a cashless society, including one in five (18%) who are not concerned at all.
“Australians are among the highest adopters of digital payments in the world, but they are rightly worried about who is protecting their interests,” Waave CEO and co-founder, Ben Zyl said.
“The current digital payments system has not been built with consumer security or control in mind – people are getting their details stolen, fumbling around with passwords, and paying ridiculous card fees and surcharges. There’s a lot of fear, particularly among those who can’t access alternatives or aren’t confident using technology.
“We need to build trust, identity, and place consumers in the driver’s seat of their digital money. With Open Banking and account-to-account payments now entering the mainstream, it’s only a matter of time before increased market competition sets a new bar for digital payment experiences. Our goal is to reinstate that traditional cash handshake in digital form.”
Close to two-thirds (63%) of Australians believe that going cashless will exclude certain population groups/exacerbate economic inequality. This concern was highest among Baby Boomers (76%), however it was also the leading worry among younger generations (Gen X – 58%, Millennials – 55% and Gen Z – 59%).
In addition, over half (58%) of Australians expressed concern that if Australia becomes a cashless society they will pay more in banking and card fees overall, while two fifths (42%) of Australians admit they don’t trust financial services to operate ethically in a cashless society. Further, close to one third (29%) don’t trust payment methods that are not exclusively between the customer and merchant.
Interestingly, close to half of Australians expect to experience ‘cash nostalgia’ if physical money is phased out, with 42% admitting they will miss the opportunity to handle cash in hand if Australia becomes a cashless society. This attitude was again higher among Baby Boomers (49%) but still significant among Millennials (37%) and Gen Z (38%).
What’s more, one third (34%) of Australians say they feel less in control over their spending when making payments in digital form. Women are most concerned about losing control of spending in digital form (39% compared to 30% of men), while younger Gen Zs (34%) are as much affected by this as Baby Boomers (35%).
“Whether you’re younger or older, the psychology around cash is unique. We like the feel of it, the sense of control, and we tend to spend less when we pay in cash. It’s up to governments, banks and retailers to move faster in adopting and promoting the latest technologies to create a cashless system for consumers that is fair, transparent and user-friendly for everyone,” Zyl added.