Cashless society

[Value Hunter]

Well someone has to cover the $410 Million cash handling costs, I have been saying here for ages cash is expensive to handle, and will need to have a charge applied eventually.

Its just a standard cost of doing business just like the rent the pay for their head-office, the $10 million dollars of bonuses they pay their CEO, etc. Do they need to charge everybody in Australia a $2 annual levy to pay their senior management bonuses?

 

[Value Collector]

Because you are a big four bank.
Cash was factored in long ago. Now they are just gouging.

Nah, cash is getting funded less and less, so it is time to make the people that are heavy users take more of the cost

 

[Value Collector]

Its just a standard cost of doing business just like the rent the pay for their head-office, the $10 million dollars of bonuses they pay their CEO, etc. Do they need to charge everybody in Australia a $2 annual levy to pay their senior management bonuses?

Not really, because more people are going cashless, and they pay their set of fees for that eg eftpos fees, some of which are passed on to the consumer.

Why, should the people using cashless system pay for that and also subsidise the cash users?

As I said it’s like a Buffett owner realising only 10% of the customers are drinking alcohol, so they lower the cost of the Buffett and charge an alcohol fee for those that want to drink it.

 

[Value Collector]

Do you honestly think they never charged in some form for cash after all these years?

The cost has always been spread across everyone, but with 90% of people now not using it, it’s time to put the more of the cost on to the heavy users.

There are people here who have been saying they avoid cards because of the fees involved, and I have said that there are huge costs but they just are being subsidised, this levels the playing field with card users who already pay their own way.

 

[JohnDe]

Because you are a big four bank.
Cash was factored in long ago. Now they are just gouging.

And you need to factor in that the banks make money from everyone's deposits. They give a small fraction back to customers in the form of interest, but they take a lot more from lending and fees.

Banking started out as a form of security, they helped protect peoples money from theft and loss. For that they charged a small fee. But then the banks started to compete against each other, they wanted people to deposit their cash in their bank so that they could lend it and charge large interest rates. To entice depositors they offered interest payments, etc.

Just like the Coles and Woolies factor, the big banks have swallowed most of the competition.

Maybe if the government gave some sort of incentive for smaller banks to be able to compete, we might see a return of true competition.

Other than that, turn your cash into gold and store it in a safe at home. Like a couple of my customers are doing. They don't earn interest, but gold prices keep going up, there are no fees, nor scams.

 

[Knobby22]

Maybe if the government gave some sort of incentive for smaller banks to be able to compete, we might see a return of true competition.

I'm with Great Southern Bank.
Member owned, no shareholders. Been around since 1946 (formally CUA).
Excellent service. very competitive. Have completely closed all my CBA accounts some years ago.

www.greatsouthernbank.com.au

 

[Craton]

I'd like to know the bank's budget for implementing and managing their IT systems, versus handling cash.

...and on that note and thanks to the ever connected online world, how much have the banks lost in hacking that we plebs have no idea about?

Personally, after upgrading my mobile phone earlier this year and setting up banking apps, I tried to perform a Direct Debit to a new biller (a reputable watch repairer in Adelaide). Couldn't do it, the app said I needed to call the bank. Did so and found out it was all to prove it was me.

Even though it was sorted after a few hours on the phone, and this is what really pricked my ears up, they'd approve the transfer but if it turned out to be fraudulent, the bank basically told me I'd been warned and that the money would not be "unrecoverable" as in lost forever.
"Are you sure you can trust this person/business?" still rings in my ear.

This was really rammed home when it was mentioned (or let slip) that many customers were being scammed and had lost money, that my failed DD was a safe guard against fraud/scams etc.
Fair enough, still I couldn't shake the feeling that there was more to this than met the eye.

One thing I failed to mention is the very low saving rate hence the banks have bugger all of our dosh to garner more profits from.

From money.com.au that graph looks anaemic.

 

[divs4ever]

I'm with Great Southern Bank.
Member owned, no shareholders. Been around since 1946 (formally CUA).
Excellent service. very competitive. Have completely closed all my CBA accounts some years ago.

www.greatsouthernbank.com.au

my main bank is a different 'members owned' bank

my family had nearly 100 years as customers with a MAJOR bank , and have had all sorts of issues with them , so i have a relatively small amount of cash with them ,( most of the time ) it is mainly for share trading/transactions )

 

[Bellcose]

...and on that note and thanks to the ever connected online world, how much have the banks lost in hacking that we plebs have no idea about?

Personally, after upgrading my mobile phone earlier this year and setting up banking apps, I tried to perform a Direct Debit to a new biller (a reputable watch repairer in Adelaide). Couldn't do it, the app said I needed to call the bank. Did so and found out it was all to prove it was me.

Even though it was sorted after a few hours on the phone, and this is what really pricked my ears up, they'd approve the transfer but if it turned out to be fraudulent, the bank basically told me I'd been warned and that the money would not be "unrecoverable" as in lost forever.
"Are you sure you can trust this person/business?" still rings in my ear.

This was really rammed home when it was mentioned (or let slip) that many customers were being scammed and had lost money, that my failed DD was a safe guard against fraud/scams etc.
Fair enough, still I couldn't shake the feeling that there was more to this than met the eye.

One thing I failed to mention is the very low saving rate hence the banks have bugger all of our dosh to garner more profits from.

From money.com.au that graph looks anaemic.

Same happened to me when I made a payment to a new payee. I suspect it's got a lot to do with those who have lost funds, clamouring the banks "should do something." Now they are starting to "do something" and causing hiccups to the likes of you and me. You can thank those clamouring for banks to "do something" for the situation.

And financial institutions have an obligation to adopt "Know Your Client" which requires, when opening an account to provide details of your income source, etc as well as provide ID (Medicare, driver's licence.) As part of that process some are asked in a few years on a random basis to re-verify those details.

https://www.austrac.gov.au/business/core-guidance/customer-identification-and-verification/customer-identification-know-your-customer-kyc

 

[moXJO]

The cost has always been spread across everyone, but with 90% of people now not using it, it’s time to put the more of the cost on to the heavy users.

There are people here who have been saying they avoid cards because of the fees involved, and I have said that there are huge costs but they just are being subsidised, this levels the playing field with card users who already pay their own way.

Which is basically funnelling people into digital Which is bad for society on multiple levels.
Cash was factored in from day dot. They are already rolling in profits. I don't buy the sob story of "cost of cash". Sounds more like another profit grab.

 

[Value Collector]

Which is basically funnelling people into digital Which is bad for society on multiple levels.
Cash was factored in from day dot. They are already rolling in profits. I don't buy the sob story of "cost of cash". Sounds more like another profit grab.

Well they say it cost them $410 Million last year in cash handling costs, that’s a pretty big cost to absorb for a shrinking number of your customers.

Digital payments are not only cheaper, but the consumer of those services already pays fees to cover its costs.

Why should people that already pay their share for digital payments also be asked to subsidise the cash users.

What is wrong with user pays? What is wrong with paying your fair share for the service you use?

 

[moXJO]

Well they say it cost them $410 Million last year in cash handling costs, that’s a pretty big cost to absorb for a shrinking number of your customers.

Digital payments are not only cheaper, but the consumer of those services already pays fees to cover its costs.

Why should people that already pay their share for digital payments also be asked to subsidise the cash users.

What is wrong with user pays? What is wrong with paying your fair share for the service you use?

Sure break the big four then and allow competition first.
It may have cost them that much but it's a pi55 in the pan compared to their profit. Banks had government guarantees with taxpayers money at one stage to stop them falling over.
Let's not pretend they are a "normal" business. Banks have a role to play as does the post office. Yep sucks to lose money but do your bloody job. It's to keep society functioning.

 

[Value Collector]

Sure break the big four then and allow competition first.
It may have cost them that much but it's a pi55 in the pan compared to their profit. Banks had government guarantees with taxpayers money at one stage to stop them falling over.
Let's not pretend they are a "normal" business. Banks have a role to play as does the post office. Yep sucks to lose money but do your bloody job. It's to keep society functioning.

I wouldn’t compare the $410 Million cash handling cost to their profit, because they are going to need to earn that return on their capital anyway.

I would look at it as being $410 Million they have to recover from their other customers in either higher interest, other fees or lower interest paid on bank accounts.

And it’s the 90% that aren’t using the cash services subsidising the ones that are.

 

[moXJO]

I wouldn’t compare the $410 Million cash handling cost to their profit, because they are going to need to earn that return on their capital anyway.

I would look at it as being $410 Million they have to recover from their other customers in either higher interest, other fees or lower interest paid on bank accounts.

And it’s the 90% that aren’t using the cash services subsidising the ones that are.

You are ignoring the fact they are not normal businesses.

 

[Value Collector]

You are ignoring the fact they are not normal businesses.

They are normal businesses In the sense that they require costs to be covered by revenue, and it doesn’t seem in fair to expect the revenue to be some what aligned with the source of that cost.

 

[moXJO]

They are normal businesses In the sense that they require costs to be covered by revenue, and it doesn’t seem in fair to expect the revenue to be some what aligned with the source of that cost.

Oh... normal businesses get government bailouts with taxpayers cash do they?
If they are not upholding required functions to society by surreptitiously pushing digital (because they can rake in fees). Then you don't deserve a big four slot. Banks have a function that they are attempting to deviate from that is not in the best interest of society.

They are government protected and basically profit protected. Not many businesses enjoy the protections the banks get.

Our politicians are only just now waking up to the fact cash is important if the digital system is disrupted.
Being one cyber attack on the swift system, Grid blackout, emp, upcoming risks would be quantum computers, AI powered cyber attacks.
The risks are numerous and our current population is full of unprepared idiots. This country would be stuffed.

Banks should not be dictating direction of cash. Politicians need to take a hard stance. Even if it is as something trivial as a $3 fee.

 

[Value Collector]

Oh... normal businesses get government bailouts with taxpayers cash do they?

Firstly when has that actually to an Australian bank happened?

Secondly they pay an insurance fee, called the Bank Levy which is a percentage of deposits that covers any government assistance to protect depositors, even though no bank has failed causing depositors to lose money since 1890.

If they are not upholding required functions to society by surreptitiously pushing digital (because they can rake in fees). Then you don't deserve a big four slot. Banks have a function that they are attempting to deviate from that is not in the best interest of society.

They don't have to offer services for free, they are entitled to cover their costs.

They are government protected and basically profit protected. Not many businesses enjoy the protections the banks get.

No they aren't, the depositors have government protection, but banks call definitely fail and wipe out shareholders.

Our politicians are only just now waking up to the fact cash is important if the digital system is disrupted.
Being one cyber attack on the swift system, Grid blackout, emp, upcoming risks would be quantum computers, AI powered cyber attacks.
The risks are numerous and our current population is full of unprepared idiots. This country would be stuffed.

Even so, why should the costs of cash handling not be past on, just because a service is essential does not mean it must be provided for free

Banks should not be dictating direction of cash. Politicians need to take a hard stance. Even if it is as something trivial as a $3 fee.

I ask again, even if the cash service is essential, like water, food and electricity why should it be provided for free

 

[moXJO]

Firstly when has that actually to an Australian bank happened?

Secondly they pay an insurance fee, called the Bank Levy which is a percentage of deposits that covers any government assistance to protect depositors, even though no bank has failed causing depositors to lose money since 1890.


They don't have to offer services for free, they are entitled to cover their costs.


No they aren't, the depositors have government protection, but banks call definitely fail and wipe out shareholders.




Even so, why should the costs of cash handling not be past on, just because a service is essential does not mean it must be provided for free



I ask again, even if the cash service is essential, like water, food and electricity why should it be provided for free

It was guaranteed. That's a stupid argument when the government backed them with a guarantee. I'd add that they are also protected by government regulation. Small banks don't pass compliance, it's the big 4 in the drivers seat.

There are fees already in place this is an added grab. It's not "for free". It's never been for "free". Are we ignoring the ridiculous profits they have gouged?
They have cut branches, ATM's and in person services because of the profit driven model.
The only bonus is that they have to pay a reasonable amount of tax.

 

[Value Collector]

It was guaranteed. That's a stupid argument when the government backed them with a guarantee. I'd add that they are also protected by government regulation. Small banks don't pass compliance, it's the big 4 in the drivers seat.

There are fees already in place this is an added grab. It's not "for free". It's never been for "free". Are we ignoring the ridiculous profits they have gouged?
They have cut branches, ATM's and in person services because of the profit driven model.
The only bonus is that they have to pay a reasonable amount of tax.

As I said they pay the government 0.06% of deposits each year for the benefit of having their customers deposits guaranteed, but shareholders funds is not guaranteed.

As I have explained, the cost for the cash service used to be spread across everyone because everyone used it, now most of use digital payments, which we also pay for.

 

[moXJO]

As I have explained, the cost for the cash service used to be spread across everyone because everyone used it, now most of use digital payments, which we also pay for.

Because the banks moved it that way.
They created a problem to get their way.
It's a bad system by itself.