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Cashless society

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It's amazing in some respects. A quote from an RBA review.

"Non-cash payments account for most of the value of payments in the Australian economy. On average, in 2023 non-cash payments worth around $300 billion were made each business day, equivalent to around 11 per cent of annual GDP."

A high proportion (70%) of those were for settlement of foreign exchange and securities market transactions. That leaves $90 billion per day for other transactions. That's a lot of daily coffees.
 
It’s not just daily coffee, I mean people and businesses pay all sorts of bills digitally, when I ran a business I was buying about $50,000 of stock a month using my card.

Cash is extremely impractical for all the large purchases that get made regularly, that’s why we invested checks, but checks are far inferior to card transactions.
 
The most interesting part is the massive decline in the usage of cash, and with most of the costs of cash handling being fixed, you can see why it’s getting exponentially more expensive to provide cash services to a shrinking base of regular users.
 
Complete different subject. They are constantly fed a stream of anti establishment social media. Banks will be lucky to survive if competition was let in.

Cash is something that needs to be maintained for security reasons. You know the whole previous 110 pages of arguments.
 

That may be so but at least the RBA recognises that cash is essential for a number of reasons and the RBA review details a number of those aspects.

I use cash but not so much. For a trip of a week I took some readies along just in case. Didn't need to as even in small places such as Bemboka, EFTPOS was available. Probably still have $100 and some change hanging about. Cannot be fussed going to a bank to deposit it so it'll gradually get used for something. A pair of shoelaces or socks more than likely. Bugs me when the price is $6.99 and I don't get 1c change. Highway robbery.
 

The banks and financial service companies like Visa and MC don't want cash to survive, thier profits depend on the death of cash.

Many consumers don't know how much they are paying in fees; it is only in tough times that they learn.

The cashless system uses different fees for different size businesses. A large business will get a better discoun of merchant fees than a small business, creating unfair competition.

Cash is the great equaliser.

However, the decline in cash usage, increased prevalence of surcharging and changes in the way merchants are charged for card payments have led to reasonable concerns about the current framework. In particular:
  • Fewer consumers transact with cash today and are therefore unable to avoid card surcharges at the point-of-sale.
  • Many small merchants are now on blended or single-rate payment plans that charge the same fee to merchants for accepting all types of cards. This dulls the price signal to consumers, and can mean users of cheaper card payments cross-subsidise users of more expensive cards.
  • Consumers are sometimes unaware of the surcharge amount before paying and/or surcharged for amounts in excess of merchants’ cost of acceptance.[9]

The future of cash​

While cash use has declined in recent decades, it remains an important means of payment for many folks in our community (Graph 6). A significant number of Australians still primarily rely on cash to participate in the economy, including our more vulnerable members of society. Cash remains an important store of value, particularly during periods of economic uncertainty. And in serving as a backup means of payment when electronic payment methods are unavailable, including during system outages or natural disasters, cash helps to promote a more resilient payment system overall. For these reasons, the government and the RBA remain committed to supporting access to cash.

The Future of the Payments System | Speeches

Speech delivered by Brad Jones, Assistant Governor (Financial System), AusPayNet Summit 2024, Sydney
www.rba.gov.au

 
JohnDe said:
The cashless system uses different fees for different size businesses. A large business will get a better discoun of merchant fees than a small business, creating unfair competition.
Click to expand...

This is a bone of contention with me. While I accept there is a cost to maintain and upgrade the payment systems, it don't see how it can be justified for a fee to increase according to the purchase. If it cost $0.08 for $5.00 those electrons are not working any harder to process $20 for the fee to increase to $0.23. Same with those business where there is a percentage surcharge even when using a debit card. I'm OK for paying a fee for the convenience of using a system but these sliding scales are irksome. To be honest though I haven't done much business with those business. Maybe a coffee now and then and take-away food from a restaurant every so often.

I am assuming the businesses are only passing on the charge made to them by the banks and not front loading.
 

And the businesses that wear the cost of transaction fees are starting to feel the pain in these high cost/high inflation times. A brewery caft that I enjoy has been a successful business since 2010 have not passed on the cost cashless payment, but are now looking to introduce a charge in the new year -

Cash is king but who pays with cash? – Over the past 2 years, cash payments for beer and food have become a rarity. EFTPOS transactions represent over 90% of all our transactions and the bank fees are staggeringly high and amount to 10’s of thousands of Dollars for our business each year. At present, we absorb these costs but may not be able to do so in 2025. Our business encourages cash payments as we would rather spend less money on bank fees and return this to our customers and staff. We will run a ‘pay in cash campaign’ in early 2025 and depending on the outcome, decide if we will have to pass on the EFTPOS transactions fees.

I'm happy to say that I don't mind withdrawing my cash and paying with cash, helps everyone and I get to meet and talk to people.

Cashless society

@Garpal Gumnut Now just surmising. If the king of the cashless world was to be nabbed and held for ransom, would a credit card payment be acceptable ???? according to the lady at Coles, gift cards are a favoured prize of scammers, maybe kidnappers will also want a bunch of gift cards o_O
www.aussiestockforums.com
 
The system charges are mostly based on percentage of sales put through the system.

It’s just a way to spread the huge fixed costs across the users putting the most dollar value through the system.

It allows some one selling a $1 pack of gum to only pay 1 cent in fees, and a person selling $100 thing paying $1 fee.

If you divided the costs equally across a per transaction basis, selling the pack of gum would be problematic because of the fee being to high.
 
As I said I am not against maintaining cash, but I feel it should be user pays, just like the digital system, and if it is really a national security issue, they the government should pay the costs.
 
Value Collector said:
As I said I am not against maintaining cash, but I feel it should be user pays, just like the digital system, and if it is really a national security issue, they the government should pay the costs.
Click to expand...
Rather interesting this morning when I was at the radiology clinic in Midland waiting to summoned for my X-ray.
A couple were trying to pay for their treatment and for whatever reason their card was no playing the game.
The bill was about $175.
The receptionist told them if they had the cash it was accepted. As it turned out they were about $12 short.
Obviously if their card wasn't being accepted at the counter it wasn't going to work at the ATM.
Perhaps if didn't have any money on it or it was maxed out. Only they knew they answer to that.
Having been caught short myself and helped out by a complete stranger I called the young lady over to where I was sitting and asked how much did they need and gave her $15.
A good deed yes, but it also helped lift my spirits because at the moment I am bloody sick
 
Nice gesture @farmerge. Done similar when a lady in front of me was having issues with her card at a supermarket. Paid using my card. Bugger all involved as it was only milk and small stuff but the lady was obviously getting stressed.

I hope you recover quickly and soon. Best wishes.
 
The growing problem for card usage that will impact not just banking but also consumers is the use of companies like Smartpay.

So the small business now has Smartpay, no card fees at all, no monthly fee no rental fee or paper. The whole fee passed onto the consumer, the amount of the fee is show on the device used for the purchase.

By law the business should have a sign in clear site stating that the card fee will be passed on to the consumer. (this is almost non existent)

But where by law I would only be able to pass on the percentage fee that I am being charged lets say from any bank on a sliding scale. (Again I should have this in view of the customer that I am passing the fee on).

This type of business can set its own rule and charge a flat fee.

So I sell you a coffee for $5.00 and I pass on my card fee as an average that has to be the lowest I am charged, lets say .15
Total cost $5.15 that's fair.

Now I have ditched the bank and use a 3rd party to soak all my fees.
So I sell you the coffee $5.00 but this company can charge its own fee. $0.50
Coffee $5.50. This is not fair

I see more and more business jumping on board with these companies I understand the small business, no more worry but every time I use my card at this business it's a minimum $0.50.

That's is highway robbery but I see no push back from the consumers. So I feel at the end of the day we will all reap what we sow.

I do not charge a fee in my business and I have a large charge for the end of the year. To say I have not thought about it of late though.
 
my parish church has two offerings during the mass, with the ancient wooden bowls handed down each isle for donations. The first is to help the poor and disadvantaged, the second for maintenance funds for the old and beautiful church building.

I always put a $20 or $50 in each, but I see everything in it from 20c and up. People give what they can. There is also an eftpos machine at the front, showing that the church is keeping up with the current trend.

We recently had my father’s 1 year Mass, it’s customary to offer a donation to the church. My parents were married in the church, all their children were baptised in the same church, my wife and I married in it, and our children baptised and confirmed in it. I have been to the funerals of my Grandparents, Aunts and Uncles in the church building. So when I gave my donation I gave it in cash for everyone of my family that have passed and loved the church.

I asked the priest about the cash and cashless question, and he said ‘the world is not black and white, there are many shades which make it beautiful. There are many in society that are vulnerable and need help, that includes people that have difficulty with a digital world. Be that because they are homeless, have addictions or are unable to fully comprehend, it doesn’t matter. All that matters is that we do not forget them.’

The homeless people I see in the streets don’t carry a eftpos machine. I don’t give to all of them, if they’re drunk or drugged I walk by, but if it looks like they are trying I give them 5 or 10$.

Can’t do that in a cashless world.
 
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