The Reserve Bank recently published statistics that showed cash payments for everyday purchases have fallen from 70 per cent in 2007 to 13 per cent in 2022. In the last three years, this decline has continued.

This trend has been steady but accelerated markedly during the Covid pandemic. Older Australians use cash more than younger Australians, as do people on lower incomes and in regional areas. This is hardly surprising. Access to cash is getting harder and becoming more expensive. There are fewer ATMs and many retailers now won’t accept cash. The number of bank branches dispensing cash, and number of ATM’s and other cash dispensing devices has reduced. The geographic distribution of cash withdrawal locations has become more spread out. Some more remote regional towns have no access to cash. This trend is not unique to Australia. Sweden is now cashless. There is abundant data for those interested in the RBA’s report on the topic of January 30, 2025.

In response to this trend, Treasury is sensibly consulting on the need for a mandate to ensure the needs of the population for access to cash with the view of a mandate being introduced in 2026. Many stakeholders have strong views on the topic.

There are important consequences from the trend away from cash. Some are good and some are not. The cash economy can facilitate tax evasion and money laundering and there can be security concerns with cash. Conversely, privacy and convenience issues and other types of security concerns arise from digital payments. Cash is a fail-safe backup to internet outages and a mistrust of banks and big data are also good reasons to use cash.

If cash disappears it is likely to favour our already hyper-profitable and oligopolistic retail banking sector, who stand to gain from high merchant fees and will save costs on cash delivery and distribution. Card surcharges may operate as a silent form of inflation. Large retailers will undoubtedly benefit over small businesses. Poor people who like the ease and control cash offers for budgeting purposes will also suffer. The vast amount of valuable data that is collated from consumers for commercial purposes from cashless transactions will increase and the consumer will receive no direct dividend for parting with their valuable personal data. Society will be more vulnerable to tech outages and cyber attacks with no cash backup. These are serious potential concerns.

In the short term, digital and cash transactions will continue concurrently. But there is a likely near future where physical cash ceases to exist. The dependency by seniors on cash is generational and will be temporary as more Australians become accustomed to a cashless economy, but once cash is gone you can be sure it won’t come back and any negative and unforeseen consequences won’t be readily reversible or addressable.

There is a real risk that the freedom, anonymity and flexibility that cash affords will be permanently lost and won’t be offset by the benefits from ceasing the use of cash. If everything goes pear-shape with the government, big tech and big banks, access to cash would be handy, even if access to it is controlled by the same institutions that control digital payments. There are plenty of people who consciously choose an analogue lifestyle over a digital one and having a roll of bank bills in your pocket or under your mattress is one expression of this. Everyone has now been forced to use a smart phone, whether they like it or not, with Covid again used by the government to force basic government services to be acquired digitally. For different reasons, attempts are being made by the government to force everyone to buy hugely impractical and expensive electric vehicles and the forces driving a cashless economy are similarly inexorable.

Governments need to be alive to the risk that overly rapid digital transitions can tend to disrupt more vulnerable members of society and can lead to unforeseen consequences. The public need to be alive to the possibility that the demise of cash could change their lives in unhelpful ways and allow greater control from powerful institutions and potentially lead to unhealthy levels of autocratic control from governments.

Andrew Christopher is a lawyer and writer and lives in Sydney