The statistics have hit just as the RBA prepare to introduce its $1 billion New Payments Platform (NPP), which is set to release sometime in 2017.
The new system means businesses and consumers will be able to transfer their funds in ‘real-time’ without the usual three-day waiting period.
BSB and account numbers will be scrapped in favour of a more unified electronic payment system.
According to the RBA’s latest payments data, the number of ATM withdrawals in January fell by a whopping 7.7% compared to last year.
This follows on from 2 consecutive years of ATM withdrawals falling by more than 6%.
Withdrawing cash during debit transactions is also falling at the fastest annual rate on record.
However, these figures are hardly surprising, with the introduction of electronic payment systems such as PayPass, payWave, and digital wallets changing the way we handle money.
Many phone cases have now introduced card holders and even contactless payment tokens, showing us that the need for a wallet is almost unnecessary.
In his Economic Insights report, CommSec Chief Economist Craig James said the use of both credit and debit cards is soaring, particularly when it comes to smaller purchases.
“The versatility of ‘Tap and Go’ has caused people to use cards more often for smaller transactions, but credit card debt is still falling compared with a year ago, at a time when wages are up near 2 per cent,” James said.
James added that digital transactions pose financial institutions with the challenge of efficiently configuring brick-and-mortar branches.
Almost cashless countries
Australia isn’t the only country that has seen a rapid decline in ATM withdrawals.
A MasterCard Advisors report in 2013 measured different nations’ progress toward electronic payment mechanisms.
— ABC News 24 (@ABCNews24) December 18, 2015
Singapore was top of the list, with approximately 61% of all consumer transactions now done using non cash methods.
They were followed closely by The Netherlands (60%), France (59%), Sweden (59%), and Canada (57%).
Australia is 9th on the list after the USA, with Aussies making only 35% of their transactions electronically.
|Non-Cash Payment Use By Country|
|Country||Non-cash consumer payment percentage (estimated)|
|Source: MasterCard Advisors ‘The Cashless Journey’, 2013.|
In the report, Hugh Thomas, the report’s author, said that despite the growing cashless society, cash still accounts for approximately 85% of all global consumer transactions.
“The persistence of cash is surprising, given its inconveniences and risks,” he said.