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The move to a cashless society isn’t just a possibility, it’s well underway

<a href="https://theconversation.com/profiles/angel-zhong-1204643">Angel Zhong</a>, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a> When was the last time you used cash? For many Australians using cash or even swiping a card has become a rare event. The move towards a cashless society started 50 years ago with the introduction of the Bankcard and was driven by technological advancements. But it really took off with the COVID pandemic when consumers and retailers were reluctant to handle potentially infected notes and coins. The federal government last week underscored its recognition of this trend by <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/modernising-payments-regulation">unveiling reforms</a> to regulate digital payment providers. Treasurer Jim Chalmers said: "As payments increasingly become digital, our payments system needs to remain fit for purpose so that it delivers for consumers and small businesses. We want to make sure the shift to digital payments occurs in a way that promotes greater competition, innovation and productivity across our entire economy." From big cities to remote rural corners the shift towards digital payments is evident. This raises the question, is a cashless society inevitable? <h2>The phenomenal growth of the digital payments</h2> The convenience of digital transactions has become irresistible for consumers and businesses and has led to the sector eclipsing traditional payment methods. The relentless march of technology has produced myriad innovative platforms from mobile wallets to buy-now-pay-later (BNPL) schemes, each vying for a piece of this burgeoning market. A recent <a href="https://www.ausbanking.org.au/wp-content/uploads/2023/06/Bank-On-It-%E2%80%93-Customer-Trends-2023-1.pdf">report</a> by the Australian Banking Association paints a vivid picture of the digital payment industry’s explosive expansion. The use of digital wallet payments on smartphones and watches has soared from $746 million in 2018 to over $93 billion in 2022. Cash only accounts for 13% of consumer payments in Australia as of the end of 2022, a stark contrast to 70% in 2007. Digital wallets are popular with most age groups. Young Australians aged between 18 and 29 are leading the pack, with two thirds <a href="https://www.rba.gov.au/publications/bulletin/2023/jun/consumer-payment-behaviour-in-australia.html">using digital wallets</a> to pay for goods and services. About <a href="https://www.ausbanking.org.au/almost-40-leave-wallets-at-home/">40% of Australians</a> are comfortable leaving home without their actual wallets or even credit or debit cards, as long as they have their mobile devices with digital wallets. The astonishing speed at which Australians have embraced digital payments places the country among the top users of cashless payments globally, surpassing the United States and European countries. Digital wallets are not the only players in this space. The use of BNPL products is also growing rapidly in Australia, which was where many of the large-scale products in this category started. The Australian Securities and Investment Commission (ASIC) reports the total value of all BNPL transactions increased by <a href="https://asic.gov.au/regulatory-resources/find-a-document/reports/rep-672-buy-now-pay-later-an-industry-update/">79% in the 2018–19 financial year</a>. This continues into 2022 with an annual growth beyond 30% according to the <a href="https://www.rba.gov.au/publications/annual-reports/psb/2022/the-evolving-retail-payments-landscape.html">Reserve Bank of Australia</a> (RBA). PayID and PayPal payments are also claiming their shares in this space. <h2>Are government regulations necessary?</h2> The government’s planned regulation of the system, contained in amendments to the Reforms to the Payment Systems (Regulation) Act 1998, is a big step towards establishing a secure and trustworthy cashless society in Australia. It will subject BNPL and digital wallet service providers like Apple Pay and Google Pay to the same oversight by the RBA as traditional credit and debit cards. The regulations will require providers meet clear standards for security measures, data protection and dispute resolution to give Australians confidence their funds and personal information are safeguarded. With increasing concern over cyber attacks, the regulations will help reduce the risk of fraudulent activities and money laundering and help identify suspicious transactions, maintaining the integrity of the financial system. Also, regulation will promote fair competition and market stability by levelling the playing field and by preventing monopolies. While banks support the forthcoming regulation, new market players are less positive. For example, Apple Pay says it is merely <a href="https://www.afr.com/companies/financial-services/new-rba-powers-to-regulate-apple-google-payments-20231010-p5eb6d">providing technical architecture</a> rather than payment services. The current regulatory debate is not new. When credit cards made their debut in Australia in the early 1970s, there were hardly any safeguards for consumers. This led to card users being hit with high interest rates on money owed, sneaky fees and aggressive marketing tactics. Consequently, regulations were introduced to hold card providers to a standard of responsible behaviour. Today, they must openly disclose interest rates, fees and charges, and follow stringent guidelines in advertising their products and services. Regulating digital wallet providers strikes a crucial balance between innovation and accountability, ensuring life-changing technology continues to serve the public interest. The shift towards a cashless society in Australia isn’t just a possibility, it’s already well underway. The blend of technological advancements, changing consumer preferences and regulatory adaptations has set the stage for this transformation. The new regulations will help Australians navigate this transition more confidently.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/215446/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/angel-zhong-1204643">Angel Zhong</a>, Associate Professor of Finance, <a href="https://theconversation.com/institutions/rmit-university-1063">RMIT University</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/the-move-to-a-cashless-society-isnt-just-a-possibility-its-well-underway-215446">original article</a>.

Money & Banking

Concerns for seniors in shift to cashless society

Experts have voiced their concerns that senior Aussies will be left behind as the banking industry continues to move away from using cash. National Seniors Australia chief operating officer Chris Grice said there has been a "big shift to getting people off cash", as many financial institutions favour digital transactions. While this shift is geared towards leaning into technological and advancements and making things as convenient as possible, there are worries that older Aussies will be left struggling with the change. "The feedback we're getting it is not as easy as, you know, just tap and go and away you go," Mr Grice told <a href="https://9now.nine.com.au/today/commonwealth-bank-statement-on-claims-of-cashless-branches/63ed8948-8dbc-40a9-a2cc-a58b2b94255e" target="_blank" rel="noopener">Today</a>. "Some of these regional communities in particular, have challenges around internet access." While cash will still be readily available, Mr Grice warned that people trying to access their cash could face increasing transaction fees at ATMs. Meanwhile, Commonwealth Bank has responded to reports that it has increased the number of "cashless" branches, where a general banking teller is not provided to service customers, saying Cash withdrawals and deposits are available at all Commonwealth Bank branches and Specialist Centres." They went on to say that Specialist Centres, for people who require a face-to-face service, will remain in "major metropolitan locations". There are fears that a growing number of cashless branches across the entire banking industry would disadvantage older Australians who rely on cash as their primary form of banking, leaving many wonder how they will access their money given the limitations. Image credits: Getty Images

Money & Banking

Big changes for Bunnings Warehouse snags

There’s nothing quite like a weekend shop at Bunnings, largely because it means there’ll be a fresh snag waiting for you post-shop, and with the hardware store’s latest announcement, it will be even easier to get your hands on one. Bunnings Warehouse has announced it is rolling out mobile payment options for customers who aren’t carrying cash or coins on them. Until now, most Bunnings sausage sizzles largely relied on cash payments, at the discretion of each community group that hosts their sausage sizzle, but the cardless concept proved difficult in a largely cashless economy. The Bunnings website states, "Not-for-profit organisations are able to book a sizzle with their local store - they need to bring volunteers and adequate supplies and Bunnings helps with the rest.” "The rest" being the addition of free mobile payment facilities. "We offer a free mobile payment option to community groups fundraising through sausage sizzles at our stores, providing an easy way for them to maximise fundraising and offering customers a cashless way to pay for their snag and support their local community group," said Bunnings General Manager Operations Matt Tyler in a statement. There will be no additional cost to customers or community groups, who previously had to bring their own EFT machine if they wanted to pay by card. Bunnings Warehouse will be incurring all the transaction fees to ensure community groups get 100 per cent of all the money raised. Image credit: Shutterstock / Instagram

Food & Wine

Has Labor learnt from the failure of the cashless debit card?

Legislation passed through the House of Representatives this week to wind down the cashless debit card (CDC), which was introduced into the East Kimberley and Ceduna in 2016 and since applied at other trial sites around Australia. The card compulsorily quarantines 80% of social security payments received by working-aged people. Implementing the CDC has cost more than <a>$170 million</a>. Yet <a href="https://www.uq.edu.au/news/article/2020/02/compulsory-income-management-disabling-study-shows" target="_blank" rel="noopener">research</a> shows it does more harm than good to people forced to use it. First Nations organisations, social service organisations, and others have consistently <a href="https://www.theguardian.com/australia-news/2020/nov/03/cashless-welfare-card-fewer-than-10-of-senate-inquiry-submissions-back-bill" target="_blank" rel="noopener">argued against its expansion</a>. The Albanese government says winding back the CDC will “leave no one behind”. But its legislation leaves more than 23,000 mainly First Nations people in the Northern Territory – as well as people in other parts of the country – on the <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/FlagPost/2017/June/BasicsCard_and_Cashless_Debit_Card" target="_blank" rel="noopener">BasicsCard</a>, a longer-standing compulsory income management scheme run by the Department of Social Services. We have known since 2014 that the BasicsCard <a href="https://caepr.cass.anu.edu.au/highlights/evaluating-new-income-management-northern-territory-final-evaluation-report-and-summary" target="_blank" rel="noopener">fails to meet its stated objectives</a>. Research published by the ARC Centre of Excellence for Children and Families over the Life Course found its use correlated with <a href="https://www.lifecoursecentre.org.au/research/journal-articles/working-paper-series/do-welfare-restrictions-improve-child-health-estimating-the-causal-impact-of-income-management-in-the-northern-territory/" target="_blank" rel="noopener">reductions in birth weight</a>, falls in <a href="https://www.lifecoursecentre.org.au/research/journal-articles/working-paper-series/the-effect-of-quarantining-welfare-on-school-attendance-in-indigenous-communities/" target="_blank" rel="noopener">school attendance</a> and other negative impacts on children. These are significant findings. The research suggests several possible explanations for reduced birth weight, including income management’s potential role in increasing stress on mothers, disrupting financial arrangements within the household and creating confusion about how to access funds. <h2>Strong opposition</h2> Given the government’s talk of <a href="https://www.smh.com.au/politics/federal/anthony-albanese-s-speech-at-garma-festival-annotated-20220729-p5b5sp.html" target="_blank" rel="noopener">respect and reconciliation</a>, it’s hard to know why it would continue a program introduced as part of the Howard government’s racially discriminatory and widely criticised <a href="https://www.theguardian.com/australia-news/2017/sep/02/northern-territory-intervention-violates-international-law-gillian-triggs-says" target="_blank" rel="noopener">Northern Territory Emergency Response</a>. When the Morrison government attempted to move people in the Northern Territory from the BasicsCard onto the CDC, <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/CashlessCardTransition/Submissions" target="_blank" rel="noopener">First Nations</a> leaders were clear about how damaging the BasicsCard has been, and recommended <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/CashlessCardTransition/Submissions" target="_blank" rel="noopener">genuinely voluntary schemes</a> instead. As shadow minister, Linda Burney supported that position. “Our fundamental principle on the basics card and the cashless debit card [is that] it should be on a voluntary basis,” she <a href="https://www.theguardian.com/australia-news/2022/apr/19/cashless-welfare-labor-vows-to-end-compulsory-use-of-basics-card">said</a> earlier this year, adding: <blockquote> If people want to be on those sorts of income management, then that’s their decision. It’s not up to Labor or anyone else to tell them what to do. At the moment it’s compulsion and that’s not Labor’s position. </blockquote> Yet the legislation introduced into the house last week maintains compulsory income management via the BasicsCard, promising only consultation. It leaves the door wide open for continued compulsory income management. As social security minister Amanda Rishworth said in her second reading speech, the bill allows her: <blockquote> to determine, following further consultation with First Nations people and my colleagues, how the Northern Territory participants on the CDC will transition, and the income management arrangements that will exist. </blockquote> <h2>Policy from above</h2> We have learnt a lot from the CDC, including how government claims that communities can decide about who goes on and off income management are often used to legitimise the continuation of compulsory income management. Both the CDC and BasicsCard are ideas that were developed and lobbied for by the Australian political and business elite. They never came from the “community”. The BasicsCard was one of many measures implemented under the Northern Territory Emergency Response, which included the suspension of the Racial Discrimination Act and the use of the <a href="https://theconversation.com/ten-years-on-its-time-we-learned-the-lessons-from-the-failed-northern-territory-intervention-79198" target="_blank" rel="noopener">Australian Defence Force</a>. The CDC, on the other hand, was a key recommendation of mining billionaire Andrew Forrest’s 2014 <a href="https://www.niaa.gov.au/resource-centre/indigenous-affairs/forrest-review" target="_blank" rel="noopener">National Indigenous Jobs and Training Review</a>. Since it was introduced, Forrest and his Minderoo Foundation have advocated for its extension. The government used much-needed funding for local services as a sweeetener to gain communities’ agreement for the CDC to proceed. In some cases, the threat of <a href="https://caepr.cass.anu.edu.au/sites/default/files/docs/Working_Paper_121_2017.pdf" target="_blank" rel="noopener">funding cuts</a> was used in negotiations. In contrast, proposals from communities themselves for appropriate community- and Aboriginal-controlled services had long been overlooked. <h2>Real consultation?</h2> Governments routinely use “consultation” as a label for what are essentially information sessions, with no alternatives on the table, in an effort to signal broad-based support. In the case of the CDC, <a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwi__I3yoKf5AhU9R2wGHSjBAuwQFnoECC8QAQ&url=https%3A%2F%2Fwww.aph.gov.au%2FDocumentStore.ashx%3Fid%3D9e59ccc9-b9e6-4fad-9fb6-2a992d84fd44%26subId%3D516467&usg=AOvVaw19C21P3oIBS4l5A1b2pr0R" target="_blank" rel="noopener">calls for the program to be aborted</a> or changed dramatically were long ignored. Those who were forced onto the BasicsCard as part of the intervention were not offered a consultation process by the Howard government. And now, the Labor government has also failed to embrace their views and opted for a path of more consultation. If Labor forces people to stay on the BasicsCard, what has it learnt from the CDC? Governments have spent more than $1 billion implementing the two failed compulsory income management schemes, and the new government has implicitly committed to spending more. Imagine what else this money could be going towards. This article originally appeared on <a href="https://theconversation.com/has-labor-learnt-from-the-failure-of-the-cashless-debit-card-188065" target="_blank" rel="noopener">The Conversation</a>. Image: Shutterstock

Legal

Why the use of cash is rapidly declining

When was the last time you used cash to pay for something? Do you even have cash in your wallet right now? The way we pay has drastically changed over the past few years with so many new options available, such as buy-now-pay-later and contactless payments. According to the annual <a href="https://worldpay.globalpaymentsreport.com/en" target="_blank" rel="noopener">Global Payments Report</a>, cash payments in Australia will amount to just two per cent of transactions by 2025. The report also predicts that digital wallets that are readily available with just two clicks on a smartphone, will be the preferred method of payment in just two years. This will overtake the use of credit and debit cards. About 40 per cent of transactions across the country are composed of debit cards, following closely with credit cards at 35 per cent, digital wallets sitting at 11 per cent, cash seven percent, and buy-now-pay-later options at a mere four per cent. Thanks to Covid-19 and periods of lockdown, most Aussies opted out of using cash, with the Australian Banking Association reporting a decline in use of ATMs by 20 per cent. "Covid-19 accelerated trends in our society and changed the way we live our lives. Working from home will forever be more prominent within the workforce, we have steered away from using cash and as a result are seeing an increase in card and technology payments and the existing trend of doing banking online instead of in a branch has only continued," ABA chief executive Anna Bligh told <a href="https://www.9news.com.au/national/australia-cash-use-declining-predicted-to-be-two-per-cent-value-in-2025/29a6febb-f8ab-49cf-9462-56fd20a22a33" target="_blank" rel="noopener">Nine News</a>. "As we have seen more people go away from using branches, it's no surprise to see banks invest in areas where customers prefer to bank, such as in their online platforms and apps.” The ABA also showed that one in 10 Aussies regularly leaves their home without their wallet, while more than one in three use digital wallets weekly. Image: Shutterstock

Money & Banking

Pauline Hanson wages war on welfare recipients

Pauline Hanson has claimed people on welfare have “lost their rights” in a scathing speech where she was also asked directed to withdraw personal comments she made towards an Aboriginal senator. Speaking in support of cashless debit cards that critics have dubbed as “racist”, the One Nation leader shocked the chamber on Wednesday by declaring anyone relying on welfare had forfeited their right to decide how they spend the money. The card links 80 per cent of welfare payments to a cashless card to stop the purchase of drugs, alcohol and pornography. “That’s what this card is about. It’s not about a person’s rights,’’ Senator Hanson said. “When you go onto this card, you basically lose your rights as well. If you go on a welfare system, you’ve lost your rights.” The Morrison Government’s plan to introduce to welfare card as a permanent initiative didn’t go down too well after Senator Rex Patrick announced he would oppose the legislation. But the plan was back in action after Stirling Griff from Centre Alliance indicated he would back changed to extend it for two years. Hanson has said there have been many positive effects that came from the cashless welfare card, which restricts recipients from spending money on drugs, alcohol and pornography. “There have been increased purchases of baby items, food, clothing, shoes, toys and other goods for children,’’ she said. “That’s why they are quite happy to be on the card. They can say: ‘I can’t give you money. I haven’t got it.’ Humbugging is in these communities. They know that family members are taking money from them.” However, the One Nation leader then turned her sights on the Greens Senator Lidia Thorpe who has described the card as “racist.” “I can’t let go what Senator Thorpe said earlier in this chamber. She commented that it’s her land,’’ Senator Hanson said. “Senator Thorpe talks about her land. What about the white part? Where’s her white father in all of this, who I should say is a member of the One Nation party?.” The remarks then prompted a demand from the Deputy President of the Senate Sue Lines that Senator Hanson withdraw the remarks. “Senator Hanson, are you arguing with the Deputy President of the Senate? I’ve directed you to withdraw those remarks,’’ she said. “It is my responsibility under the standing orders of the Senate to ensure that debate is within the standing orders. I further remind you of a statement the President made on several occasions in this place about how this is a workplace and how we need to respect one another and to not refer to other senators in a personal way. So I would ask you to withdraw the remarks that you made about Senator Thorpe’s family. “It’s not a debating point. I’m directing you to do that, so please do that."

News

"Total disgrace": Why Woolies is facing more boycotts

Woolworths customers have responded in fury after more stores transitioned into being completely cashless this week. A trial was announced for 11 stores across Sydney and Melbourne earlier this year and now the grocer has since expanded the move to three more stores. Five of the original 11 stores that have trialled cashless payments have experienced temporary closures, which mean that a total of nine Metro locations currently are enforcing mandatory digital payments. Melbourne’s Bourke Street and Elizabeth Street Metro stores introduced cashless payments in July. On Monday the Caulfield North and Yarraville stores did the same. Sydney Metro stores on York and George Street in the city, as well as Manly, on the Northern Beaches, also made the transition in July. Rosebery in Sydney’s south introduced the change on Monday. Customers have been swift in slamming the new system which they say requires them to pay for their goods using the available EFTPOS machines. One shopper said that she had been a loyal customer to the supermarket for over 20 years and would “shop elsewhere” if Woolies went cashless at any of its stores. “Please consider what you are doing. Giving people the choice to pay with cash is and always will be essential in my view,” her post on the retailer’s Facebook page read. Another shopper said the change was a disadvantage for disabled people, who they said only used cash because “they do not understand when they use a card they are actually spending money”. “You are a total disgrace going card only. Apart from that a lot of older people only use cash,” they wrote. Someone else labelled Woolworths as “the biggest bully out” due to its decisions “I am boycotting Woolworths and any other business who will not accept my legal tender cash. I vow to never attend a Woolworths store again, and instead I will choose to trade with stores who respect me,” one other shopper declared in a post. Other angry customers also argued that it was wrong for the supermarket to refuse cash, as it was “legal tender”. Woolworths says the stores that were subject to a physical cash ban had already been experiencing payments that are predominantly cashless. “We know that cash remains an important payment option for many of our customers and 99.14 per cent of our stores will still accept cash. That is all of our supermarkets and majority of our Metro stores,” a response from a Woolworths employee read. Woolworths has said in a statement that the cashless was brought in to offer a seamless checkout experience “for busy inner-city customers”. “We want Woolworths Metro to be the easiest place to pick up your next meal, top up your grocery shop or buy your next coffee,” a spokesperson told Yahoo News Australia. “To help make shopping as seamless as possible for busy inner-city customers we’re trialling card only transactions in a handful of Metro stores in CBD locations. “We will closely monitor the feedback from our customers as we trial this new offer.”

News

The controversial change coming Woolworths stores

Woolworths will expand its trial of cashless Metro stores in Sydney and Melbourne over the coming weeks, creating nine stores that will no longer accept physical money. The trial is supposed to help customers at CBD locations get in and out of the store quickly and efficiently. But some shoppers have frowned upon the move, with one saying they travelled to three different stores in Sydney before they were able to buy something with cash. Metro stores on Bourke St and Elizabeth St in Melbourne, and North Sydney, Manly and York St in Sydney are not accepting cash, and same will be implemented in Yarraville and Caulfield North in Melbourne and Roseberry in Sydney on October 12. A spokeswoman for the company said feedback would be “closely monitored” during the trial but noted a majority of customers welcomed the change. “As more and more customers choose to pay with cards, we’re trialling all electronic payments in a small selection of Metro stores which currently see very few cash transactions,” she said. “We understand cash remains an important payment option for many of our customers and it continues to be offered in all Woolworths supermarkets and the majority of our Metro stores.” While all stores apart from the nine Metro stores have a cash option, some stores will have a smaller number of machines that accept cash than others.

Technology

Why cashless welfare cards do more harm than good

The Australian government touts compulsory income management as a way to stop welfare payments being spent on alcohol, drugs or gambling. The Howard government introduced the <a href="https://www.servicesaustralia.gov.au/individuals/services/centrelink/basicscard">BasicsCard</a> more than a decade ago. About 22,500 welfare recipients now use it, mostly in the Northern Territory. Now the Coalition government has big plans for a more versatile <a href="https://www.dss.gov.au/families-and-children/programmes-services/welfare-conditionality/cashless-debit-card-overview">Cashless Debit Card</a>, trialled on about 12,700 people in four regional communities in Western Australia, South Australia and Queensland. These trials aren’t complete, nor the findings compiled, but a string of senior ministers, including <a href="https://www.smh.com.au/politics/federal/scott-morrison-eyes-long-term-cashless-debit-card-roll-out-20190907-p52oxb.html">Prime Minister Scott Morrison</a>, have indicated they are already sold on expanding the program. <a href="https://www.incomemanagementstudy.com/blog/hiddencosts">Our research</a>, however, <a href="https://theconversation.com/theres-mounting-evidence-against-cashless-debit-cards-but-the-government-is-ploughing-on-regardless-123763">adds to the evidence</a> that compulsory income-management policies do as much harm as good. Financial (in)stability Over the past year we have conducted the first <a href="https://www.incomemanagementstudy.com/">independent, multisite study</a> of compulsory income management in Australia. It has involved 114 in-depth interviews at four sites: Playford (BasicsCard) and Ceduna (Cashless Debit Card) in South Australia; Shepparton (BasicsCard) in Victoria; and the Bundaberg and Hervey Bay region (Cashless Debit Card) in Queensland. We also collected 199 survey responses from around Australia. Proponents of compulsory income management champion its potential to “provide a stabilising factor in the lives of families with regard to financial management and to encourage safe and healthy expenditure of welfare dollars”, as the then social services minister, Paul Fletcher, <a href="https://www.paulfletcher.com.au/portfolio-speeches/speech-to-sydney-institute-welfare-personal-responsibility-and-the-cashless">said in March</a> last year. Our study found some individuals experience these benefits. But most face extra financial challenges. These include not having enough cash for essential items, being unable to shop at preferred outlets, being unable to buy second-hand goods, and cards being declined even when they are supposed to work. <hr /> <a href="https://images.theconversation.com/files/316964/original/file-20200224-24690-153xr6u.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/316964/original/file-20200224-24690-153xr6u.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" /></a> Survey respondents reported a range of challenges related to compulsory income management. Hidden Costs: An Independent Study into Income Management in Australia <hr /> In Playford, Jacob* told us about being on the BasicsCard, which can only be used with merchants that have agreed to not allow cardholders to buy excluded goods. The limits on where he could shop made it harder for him to manage his finances. “I couldn’t make decisions about saving money,” he told us. He and his wife used to catch the train to shop at the Adelaide markets, for example, but vendors there couldn’t take the BasicsCard. The Cashless Debit Card is intended to overcome the limitations of the BasicsCard. It’s like a debit card except it can’t be used to withdraw cash or at businesses that sell prohibited items. But Emma*, a single mother in the Bundaberg and Hervey Bay area, told of her struggles to make basic purchases using the card. It often failed – even at businesses that purportedly accepted it – and her family went without. She also felt excluded from the markets and second-hand retailers where she used to shop. Her greatest stress, however, was rent. Emma* said she had always been on time with rental payments until the Cashless Debit Card. She described one occasion when, two days after paying the rent, the money “bounced back” into her account. When she rang the card’s administrator (card payment company <a href="https://www2.indue.com.au/">Indue</a>), she was told: “It’s just a minor teething issue, just keep trying.” The extra stress from “worrying about which payments were going to get paid” was considerable. Others shared similar experiences. Social (dis)integration Supporters of compulsory income management claim it brings people back into the community by combating addiction and encouraging pro-social behaviour and economic contribution. As federal Attorney-General <a href="https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;db=CHAMBER;id=chamber%2Fhansardr%2F5d1aabc6-2984-42d1-bf5e-3f493db56d60%2F0048;orderBy=customrank;page=0;query=Cashless%20debit%20card%20SearchCategory_Phrase%3A%22house%20of%20representatives%22%20Dataset_Phrase%3A%22hansardr%22%20Speaker_Phrase%3A%22pitt,%20keith,%20mp%22;rec=1;resCount=Default">Christian Porter said in 2018</a>: “The cashless debit card can help to stabilise the lives of young people in the new trial locations by limiting spending on alcohol, drugs and gambling and thus improving the chances of young Australians finding employment or successfully completing education or training.” However, our study found the card can also stigmatise and infantilise users – pushing people without these problems further to the margins. One of the problems is that compulsory income management is routinely applied based on where a person lives and their payment type, and not on any history of problem behaviour. The large majority of our respondents indicated they did not have alcohol, drug or gambling issues. <hr /> <a href="https://images.theconversation.com/files/316963/original/file-20200224-24676-1jamv1d.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img src="https://images.theconversation.com/files/316963/original/file-20200224-24676-1jamv1d.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" /></a> The majority of survey respondents had been managing finances well before compulsory income management. Hidden Costs: An Independent Study into Income Management in Australia <hr /> But as Ray* in Ceduna explained, having the card meant others viewed him as a problem citizen. <blockquote> I’m embarrassed every time I have to use it at the supermarket, which is about the only place I do use it. I sort of look around and see who’s behind me in the queue. I don’t want anybody to see me using it. </blockquote> This was a common experience across the interview sites. Maryanne* in Shepparton told about being judged for shopping for groceries with her BasicsCard. <blockquote> I got called a junkie and I said: ‘I’m not a junkie, do you see any marks or anything?’ They were like: ‘No, but you have a BasicsCard.’ I said: ‘What’s that got to do with it? Centrelink gave it to me. I can’t do nothing.’ </blockquote> <hr /> <img src="https://images.theconversation.com/files/316965/original/file-20200224-24664-asok53.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" alt="" /> Stigma was a common concern among survey participants. Hidden Costs: An Independent Study into Income Management in Australia <hr /> A path forward The overwhelming finding from our study is that compulsory income management is having a disabling, not an enabling, impact on many users’ lives. As the policy has been extended, more and more Australians <a href="https://www.vinnies.org.au/page/Publications/National/Factsheets_and_policy_briefings/The_Cashless_Debit_Card/">with no pre-existing problems</a> have been caught up in its path. This does not mean a genuine voluntary scheme could not be maintained, but it would need to sit alongside evidence-based measures to tackle poverty. Addressing the <a href="https://raisetherate.org.au/">inadequacy of income support payments</a>, ensuring <a href="https://theconversation.com/these-job-snob-claims-dont-match-the-evidence-121429">decent employment and training opportunities</a>, and providing accessible social services and secure and affordable <a href="https://theconversation.com/supportive-housing-is-cheaper-than-chronic-homelessness-67539">housing</a> would be a better starting point for creating healthy lives and flourishing communities. <hr /> Names have been changed to protect individuals’ privacy.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/132341/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/greg-marston-737150">Greg Marston</a>, Head of School, School of Social Science, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>; <a href="https://theconversation.com/profiles/michelle-peterie-564209">Michelle Peterie</a>, Research Fellow, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a>; <a href="https://theconversation.com/profiles/phillip-mendes-101820">Phillip Mendes</a>, Associate Professor, Director Social Inclusion and Social Policy Research Unit, <a href="https://theconversation.com/institutions/monash-university-1065">Monash University</a>, and <a href="https://theconversation.com/profiles/zoe-staines-426110">Zoe Staines</a>, Research fellow, <a href="https://theconversation.com/institutions/the-university-of-queensland-805">The University of Queensland</a> This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/i-dont-want-anybody-to-see-me-using-it-cashless-welfare-cards-do-more-harm-than-good-132341">original article</a>.

Retirement Income

Why the government is persisting on cashless debit cards for welfare recipients

It would be nice if the “facts” being thrown around in the debate over the Cashless Debit Card were peer-reviewed, or even just evidence-based. Instead, there are <a href="https://www.anneruston.com.au/joint_media_release_expanding_the_cashless_welfare_in_hervey_bay_and_bundaberg">anecdotes</a>. And it’s these that are being used to justify the government’s decision to spend <a href="https://parlinfo.aph.gov.au/parlInfo/download/chamber/hansards/91962b64-398e-400e-ae19-98cf415623ec/toc_pdf/Senate_2019_07_31_7091_Official.pdf;fileType=application%2Fpdf">A$128.8 million</a> over four years continuing the existing trial of the cashless debit card in five sites in Western Australia, Queensland and South Australia and extending it to Cape York and all of the Northern Territory. The extension will lift the number of people on the card from 11,000 to 33,000. Most will be Indigenous people - its disproportionate targeting has already attracted the attention of the <a href="http://docs.wixstatic.com/ugd/b629ee_01e1002bbfc748459d2a323d278d9300.pdf">National Congress of Australia’s First Peoples and the Human Rights Commission</a>. The cashless card was recommended to Prime Minister Tony Abbott in a <a href="https://www.niaa.gov.au/sites/default/files/publications/Forrest-Review.pdf">report</a> from mining billionaire Andrew Forrest in 2014. He initially called it the “<a href="https://theconversation.com/healthy-welfare-card-begins-here-where-next-50756">Healthy Welfare Card</a>”. It wasn’t a new idea. Some A$1 billion dollars had already been spent on income management programs in the past, many of which had <a href="https://caepr.cass.anu.edu.au/highlights/evaluating-new-income-management-northern-territory-final-evaluation-report-and-summary">failed to meet their stated objectives</a>. It’s been tried before The biggest was the Basics Card introduced as part of the 2007 Northern Territory Emergency Response (the “<a href="https://en.wikipedia.org/wiki/Northern_Territory_National_Emergency_Response">Intervention</a>”) which was only made possible through the suspension of the Racial Discrimination Act. Research published by the Australian Research Council funded <a href="https://www.arc.gov.au/2020-arc-centre-excellence-children-and-families-over-life-course">Life Course</a> Centre of Excellence found its introduction was correlated with negative impacts on children, including reductions in <a href="https://www.lifecoursecentre.org.au/research/journal-articles/working-paper-series/do-welfare-restrictions-improve-child-health-estimating-the-causal-impact-of-income-management-in-the-northern-territory/">birth weight</a> and <a href="https://www.lifecoursecentre.org.au/research/journal-articles/working-paper-series/the-effect-of-quarantining-welfare-on-school-attendance-in-indigenous-communities/">school attendance</a>. It points to several possible explanations, including increased stress on mothers, disrupted financial arrangements within households, and confusion about how to access funds. The government has not addressed these serious issues. Instead, it now seeks to place those who have been left on the basics card for over ten years now, on to the cashless debit card. What was ‘Basics’ has become ‘Indue’ <img src="https://images.theconversation.com/files/167621/original/file-20170503-4096-12pb3xf.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" alt="" /> The 2016 Indue Cashless Debit Card. indue.com.au The “Indue” Cashless Debit Card trials underway since 2016 direct 80% of each payment to the card (<a href="https://www.niaa.gov.au/sites/default/files/publications/Forrest-Review.pdf">Forrest asked for 100%</a>) where it can only be spent on things such as food, clothes, health items and hygiene products. Purchases of alcohol and withdrawals of cash are not permitted. The trials are compulsorily for everyone living in the trial sites receiving a disability, parenting, carer, unemployment or youth allowance payment. My own research in the East Kimberley found it makes those people’s <a href="https://openresearch-repository.anu.edu.au/handle/1885/147866">lives harder</a>. Those targeted are a broad group needing support for a broad range of reasons, yet all are treated as if they have issues with alcohol or drugs or gambling. Most of the people on it do indeed have a common problem: that is trying to survive on meagre payments in remote environments with a chronically low supply of jobs. Of all the claims made for the card, the least believable is that it gets its users into jobs. What it does do is limit access to cash needed for day to day-to-day living. It makes it hard to buy second-hand goods, transport and (at some outlets) food, and can make living more expensive. For anyone actually struggling with addiction, it can’t substitute for treatment, a concern raised by medical specialists. While the government says the trials have been community-led, in reality consultation has been limited to a small group of people not subject to the card. When leaders in the East Kimberley who had agreed to the card <a href="https://www.theguardian.com/australia-news/2017/aug/23/aboriginal-leader-withdraws-support-for-cashless-welfare-card-and-says-he-feels-used">withdrew their support</a>, the government continued with the trial. Its success has not been established In addition to relaying on anecdotes, the government continues to cite a <a href="https://www.theguardian.com/australia-news/2017/sep/18/cashless-welfare-card-report-does-not-support-ministers-claims-researcher-says">widely condemned report</a> by <a href="https://www.dss.gov.au/about-the-department/feature/cashless-debit-card-trial-evaluation-final-evaluation-report">Orima Research</a>. Among others, the Australian National Audit Office <a href="https://www.anao.gov.au/work/performance-audit/implementation-and-performance-cashless-debit-card-trial">found this report was inadequate</a> to draw any conclusions from. Profiting from the Cashless Debit Card has been <a href="https://www2.indue.com.au/">Indue</a>, a private company whose <a href="https://nationals.org.au/our-team/federal-management-committee/">deputy chairman</a> up until 2013 is now the present President of the National Party, Larry Anthony. Indue’s involvement is helping to create a <a href="https://www.researchgate.net/publication/285590411_Is_the_Cashless_Welfare_Card_the_forerunner_to_a_Banking_Underclass">two tiered banking system</a> in which most people have a choice of financial providers, but those subject to the card are restricted to one, which provides a very different product to the others. Indue is also not a member of the Australian Banking Association, and so is not bound by the consumer protection provisions of its <a href="https://theconversation.com/the-new-banking-code-looks-impressive-but-what-will-it-achieve-120582">Banking Code of Practice</a>. The inquiry is due to report <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Community_Affairs/CashlessCardTransition">next week</a>. Given the expensive and harmful consequences of the trial, it ought to find the extension is not justified. There are better ways to spend $128.8 million that would actually help vulnerable Australians.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/123763/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Written by Elise Klein (OAM), Senior Lecturer in Development Studies, University of Melbourne. Republished with permission of <a rel="noopener" href="https://theconversation.com/theres-mounting-evidence-against-cashless-debit-cards-but-the-government-is-ploughing-on-regardless-123763" target="_blank">The Conversation</a>.

Retirement Income

"An insult": Why welfare recipients condemn cashless card

“This is a bit controversial, we know that,” deputy prime minister Michael McCormick told the <a href="https://www.michaelmccormack.com.au/media-releases/2019/9/16/address-to-the-nationals-federal-council-canberra-14-september-2019">National Party’s federal council</a>, which on the weekend voted for a national roll-out of cashless debit cards for anyone younger than 35 on the dole or receiving parenting payments. The Nationals have joined the chorus within the federal government proclaiming the cards a huge success. The Minister for Families and Social Services, Anne Ruston, has even gone so far as to claim welfare recipients are “<a href="https://www.canberratimes.com.au/story/6355110/welfare-card-users-full-of-praise-govt/">singing its praises</a>”. Really? Both McCormick and Ruston have proclaimed success based on the most recent trial of cashless welfare in Queensland. This trial began barely six months ago, and the independent evaluation by the <a href="https://www.adelaide.edu.au/future-employment-skills/research#review-of-cashless-debit-card-cdc-trial-in-the-goldfields-region-of-wa">Future of Employment and Skills Research Centre</a> at the University of Adelaide is ongoing. A more complex story emerges out of my research into lived experiences of the first cashless debit card trial, which began in Ceduna, South Australia, <a href="https://www.dss.gov.au/families-and-children-programs-services-welfare-quarantining-cashless-debit-card/cashless-debit-card-ceduna-region">in March 2016</a> I spent about three months in the town of Ceduna between mid 2017 and the end of 2018 talking to people <a href="https://insidestory.org.au/weve-lost-our-vision-a-card-cannot-give-vision-to-the-community">about life on the card</a>. All communities are diverse and people’s experiences diverge. Some liked the card, or had come to accept it, others were caught up dealing with far more significant problems. But I talked to people who found the card “an insult”. They told me it made them feel “targeted” and “punished”. They talked of degradation and defiance. They also told me the card didn’t work. As for the the claim by both Ruston (and her ministerial predecessor <a href="https://www.paulfletcher.com.au/portfolio-speeches/speech-to-sydney-institute-welfare-personal-responsibility-and-the-cashless">Paul Fletcher</a>) that the card empowers people to “demonstrate responsibility”, the opposite was true. In the words of June*, an Indigenous grandmother, foster carer and talented artist: “It has taken responsibility away from me. It’s treating me like a little kid again.” Indigenous testing grounds Ceduna, in the far west of South Australia, was the first of four sites chosen to trial cashless debit cards. The second was in the East Kimberley The location of these two trial sites meant early trial participants have been predominately Indigenous. I am of the view that Indigenous communities are being used as testing grounds for new technologies and controversial measures. In the first two trial sites, income support recipients younger than 65 have just 20 per cent of their payment deposited into their bank account. The remaining 80% goes on to their debit card, which cannot be used at any alcohol or gambling outlet across the nation. Nor can they be used to withdraw cash. The lead-grey cashless debit card is similar but different to the lime-green BasicsCard, introduced as part of the 2007 Northern Territory National Emergency Response (the “Intervention”). The use of the BasicsCard as an “income management” tool was extended to non-Indigenous people in the Northern Territory in 2010, and to other states in 2012. The BasicsCard generally quarantines 50% of a social security recipient’s income so that it cannot be spent on alcohol, gambling, tobacco or pornography. BasicsCard holders need to shop at approved stores. In contrast, the cashless debit card, administered by financial services company <a href="https://www2.indue.com.au/">Indue</a>, can theoretically be used wherever there are Eftpos facilities. Shame and humiliation My research wasn’t based on collecting statistics but “hanging out” and getting to know people. I came to see the stigma associated with the “grey card” sometimes resonated with past experiences. Robert*, for example, told me about growing up on a mission and then suddenly finding himself as “one little blackfella” in a large high school. He was acutely sensitive to the “smirks” and judgements of others whenever he used the grey card to pay for things. Pete* left high school after a couple of weeks to join an itinerant rural workforce that has since vanished. After decades of manual work, finding himself unemployed due to ill health was devastating enough. Being issued the grey card compounded his humiliation. Others voiced their belief the grey card was designed to induce shame. But they refused that shame, expressing instead a defiant belief in the legitimacy of their need for support. The welfare system often defines people by the one thing they are not currently doing – waged employment. But many people I spent time with in fact laboured constantly: it just wasn’t recognised as work. People like June*, for example, looked after sick kin, the elderly and children. Yet the grey card treated them as dependents. I heard about ways of getting around the card’s restrictions. As one acquaintance put it: “Drunks gonna drink!” One strategy involved exchanging temporary use of the card for cash. With terms that nearly always disadvantage the card holder, it has the potential to make life tougher for people living in hardship. These observations concur with the sober assessments of experts such as the <a href="https://www.smh.com.au/politics/federal/cashless-welfare-card-trial-not-working-drug-and-alcohol-centre-says-20190910-p52pv5.html">South Australian Aboriginal Drug and Alcohol Council</a>. The evaluation of the Ceduna trial for <a href="https://www.dss.gov.au/sites/default/files/documents/10_2018/cashless-debit-card-trial-final-evaluation-report_2.pdf">the Department of Social Services</a> was more positive, noting that alcohol drinkers and gamblers reported doing so less frequently. But it also noted no reduction in crime statistics related to alcohol consumption, illegal drug use or gambling. And the Australian National Audit office was so critical of the government’s evaluation it <a href="https://www.anao.gov.au/work/performance-audit/implementation-and-performance-cashless-debit-card-trial">concluded</a> that it was difficult to ascertain “whether there had been a reduction in social harm” as a result of the card’s introduction. Which makes simplistic claims about the card’s success look a bit rich. *Pseudonyms are used throughout.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" src="https://counter.theconversation.com/content/123352/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> Written by Eve Vincent, Senior Lecturer, Macquarie University. Republished with permission of <a rel="noopener" href="https://theconversation.com/an-insult-politicians-sing-the-praises-of-the-cashless-welfare-card-but-those-forced-to-use-it-disagree-123352" target="_blank">The Conversation</a>.

Retirement Income

No more checkouts! This supermarket chain has just gone cashless and cardless

Convenience store 7-Eleven has taken an Amazon approach and opened a flagship store that is completely cash and card free. The new store, which is based in Richmond, Melbourne, allows shoppers to use their smartphone to complete transactions using an app. The store has no physical checkout counter because all purchases are made via your mobile phone. Customers simply browse through the aisles, pick up the items they want and scan the barcodes on their phone. They then complete the transaction via the 7-Eleven app. 7-Eleven chief executive Angus McKay is thrilled about the new development. “Nobody likes to wait, so eliminating queues was part of the mission for this mobile checkout,” he said in a <a rel="noopener" href="https://www.news.com.au/finance/business/retail/7eleven-opens-its-first-clickandgo-concept-store-in-australia/news-story/418acddf1f1b312f2729b075c8349dd7" target="_blank">statement</a>. “In the new concept store, customers will notice the absence of a counter. “The store feels more spacious and customers avoid being funnelled to a checkout location, creating a frictionless in-store experience.” The company intends to continue trialling new functions across Australia, so your local store could be next. “Continuing our focus on providing ultimate convenience, this year we’re trialling a catering service, and we’re thinking about ways to provide an extraordinary experience to more customers, more often, in more ways that suit them,” McKay explained. “That might be delivery, it might be micro store formats. “We’re trying to push the notion of ‘convenience’ to its absolute limit.” Eagle-eyed fans spotted the changes in store yesterday and let others know via the 7-Eleven Facebook page. <iframe src="https://www.facebook.com/plugins/post.php?href=https%3A%2F%2Fwww.facebook.com%2F7ElevenAustralia%2Fposts%2F2234395256598289&width=500" width="500" height="173" style="border: none; overflow: hidden;" scrolling="no" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe> Word is that 7-Eleven got their inspiration from Amazon, who opened a similar store at the start of last year that allowed customers to use technology to take what they wanted and go. Customers entered the store by scanning the Amazon Go app on their mobile at a turnstile and every item taken off the shelf was added to the customer’s individual cart. Customers paid electronically via an account linked to their phone and left the store without exchanging cash or card for any products they purchased. Despite no staff manning the checkouts, there were some staff in the store that were used to help customers and stock shelves.

Money & Banking

Why the benefits of a cashless society are greatly overrated

After recreational cannabis use became legal in Canada last October, research shows the number of <a href="https://blogs.lse.ac.uk/businessreview/2019/02/26/legalising-cannabis-reduced-the-use-of-cash-in-canada/">bank notes in circulation</a> fell sharply. Before, marijuana buyers used cash to keep their transactions anonymous. After, there was a massive switch to the convenience of cashless payments. It’s a prime example of what makes a cashless society so attractive to law makers and enforcers wanting to put the squeeze on the “black economy” that can’t be tracked or taxed. But not everyone clinging to cash has illicit motivations. This month Philadelphia became the first major US city requiring all merchants to accept cash. This week the state of New Jersey followed suit. Other US cities and states are considering the same. The chief concern is that cashless payment systems discriminate <a href="https://www.wsj.com/articles/philadelphia-is-first-u-s-city-to-ban-cashless-stores-11551967201?mod=hp_lead_pos5">against the “unbanked”</a> – those without a bank account – making life harder for those already on the margins. “It’s really a fairness issue,” said the <a href="https://www.phillyvoice.com/philadelphia-ban-cashless-stores-first-us-city/">councillor who sponsored the ban</a>. “Equal access is what we’re trying to get.” So as nations make plans to become cashless societies, and automated teller machines start to go the way of telephone booths, it’s timely to consider the pros and cons of cashless payments. We need ensure our enthusiastic <a href="https://theconversation.com/australia-may-be-closer-to-being-a-cashless-society-but-it-wont-happen-by-2020-75258">march to the future</a> does not trample over people or leave them behind. Counting the unbanked A <a href="https://economicinclusion.gov/">national survey</a> by the US Federal Deposit Insurance Corporation shows about 8.4 million US households – or 6.5% of all households – were unbanked in 2017. Philadelphia’s new law is primarily to protect such people. Taking effect on July 1, the law requires most stores to accept cash, and forbids them charging a surcharge for paying with cash. New York, Washington and Chicago are among the cities investigating similar measures. In Britain a <a href="https://www.accesstocash.org.uk/media/1087/final-report-final-web.pdf">review of cash accessibility</a> headed by former chief financial ombudsman Natalie Ceeney has urged financial regulators to stop the country “<a href="https://www.finextra.com/newsarticle/33482/access-to-cash-system-on-verge-of-collapse-warns-report?utm_medium=newsflash&utm_source=2019-3-6&member=103992">sleepwalking</a>” into a cashless society. Its report, published this month, recommends a national guarantee that consumers will be able to access and use cash for as long as they need it. About 17% of the British population – over 8 million adults – would struggle to cope in a cashless society, the report says: “While most of society recognises the benefits of digital payments, our research shows the technology doesn’t yet work for everyone.” The tip of the iceberg is the decline in bank branches and ATMs. Two-thirds of bank branches have closed <a href="https://www.ft.com/content/1947ac8e-e8d2-11e8-a34c-663b3f553b35">in the past three decades</a>, and the rate of closure in accelerating. Cashpoints are disappearing at <a href="https://www.finextra.com/newsarticle/33386/the-numbers-dont-add-up-universal-provision-of-access-to-cash-called-into-question?utm_medium=dailynewsletter&utm_source=2019-2-15&member=6040">a rate of nearly 500 a month</a>. Learning from Sweden But this is simply the most obvious symptom, according to the Ceeney report, with evidence from other countries demonstrating the issue of merchants accepting cash is more important. “Sweden, the most cashless society in the world, outlines the dangers of sleepwalking into a cashless society: millions of people could potentially be left out of the economy,” it says, “and face increased risks of isolation, exploitation, debt and rising costs.” About 85% of transactions in Sweden are now digital. Half the nation’s retailers expect to stop accepting cash before 2025. The nation is now counting the societal costs. The Riksbank, Sweden’s Central Bank, is asking all banks to keep providing and accepting cash while government works out how best to protect those <a href="https://www.riksbank.se/en-gb/statistics/payments-notes-and-coins/payment-patterns/">who most rely on cash</a> – such as those aged 65 or more, those living in rural areas, those with disabilities and recent immigrants. An estimated 1 million Swedes are not comfortable with using a computer or smart phone to do their banking. Immigrants often do not have a bank account or credit history to get a payment card. Considering consequences “If cash disappears that would be a big change, with major implications for society and the economy,” Mats Dillen, the head of the Swedish Parliament Committee studying the issue, <a href="https://www.nytimes.com/2018/11/21/business/sweden-cashless-society.html">has said</a>. “We need to pause and think about whether this is good or bad and not just sit back and let it happen.” The New York City Council member pushing the bill to ban cashless-only stores, Ritchie Torres, agrees. He is particularly concerned about the issues of class and ethnic discrimination. “I started coming across coffee shops and cafés that were exclusively cashless and I thought: but what if I was a low-income New Yorker who has no access to a card?” <a href="http://www.grubstreet.com/amp/2018/11/new-bill-would-make-cash-free-businesses-restaurants-illegal.html">Ritchie Torres has explained</a>. “I thought about it more and realised that even if a policy seems neutral in theory it can be racially exclusionary in practice. "In some ways making a payment card a requirement for consumption is analogous to making identification a requirement for voting. The effect is the same: it disempowers communities of colour.” These are timely reminders that we should never assume that technological change is value-free, or necessarily an improvement. All revolutions have their hidden costs. We need to ensure those costs are shared equitably, and that no one is accidentally disadvantaged by them. Written by Steve Worthington. Republished with permission of <a href="https://theconversation.com/depending-on-who-you-are-the-benefits-of-a-cashless-society-are-greatly-overrated-113268">The Conversation.</a>

Money & Banking

Will New Zealand become a cashless society?

If things keep going the way they’re going, don’t expect to be hearing the questions “cash or credit” too many times in the future. As New Zealanders increasingly choose debit cards and other electronic systems as their preferred method of payment, a cashless New Zealand seems less a possibility and more of an inevitability. But what does this mean for ordinary New Zealanders? We’ve taken a broad look at some of the impacts New Zealanders can expect as we move towards a cashless society, so you understand what this means for you and your money. Increased convenience The ability to pay for something with a tap of a card is increasingly becoming a part of everyday life and as this becomes more commonplace it will be an expectation for businesses to facilitate this. Adjunct Professor with the Queensland University of Technology in Australia Noel Whittaker says, “I think it is a great thing – especially if it would force small businesses to put more money into the till and put less in their pockets. They don’t understand, that reducing the sales by taking cash from the till reduces the value of the business. Also, cash has a cost for handling, and balancing, and banking.” Increase in credit card fraud As anyone who’s ever had their money skimmed from an ATM would agree – the fact that we’re not carrying piles of cash around in our day-to-day lives may make us feel more secure, but doesn’t necessarily mean that our money is safer. As we increasingly move away from cash it’s not unreasonable to expect cyber criminals to try and exploit this, which potentially leaves us exposed to fraud. The onus is on lawmakers, businesses, and banks to evolve with this move and create technological safeguards, and for consumers to be vigilant and cautious with their purchases. Budgeting becomes more important I’m sure we’d all agree there’s quite a difference between paying for something by tapping a card against a machine and physically having to take the cash out of your wallet and give it to a cashier. As we move towards a cashless society and transactions become less materially obvious it’s important for consumers to be wary of their bank balances and budget accordingly. This will be especially important for younger generations who grow up in a world where cash is seldom. Conclusions It’s important to be conscious of the effects of a cashless society and what this means for the day to day transactions you perform with your personal finances. By understanding these changes you will be able to avoid the risks and enjoy the advantages of living in a cashless New Zealand. Noel Whittaker is a best-selling author, finance and investment expert, radio broadcaster, newspaper columnist and speaker. One of the world’s foremost authorities on personal finance, Noel recently released <a href="http://retirementhandbook.com.au/" target="_blank">The Retirement Living Handbook</a>. Co-authored with Rachel Lane, this handbook provides expert insight into retirement communities and is available <a href="http://retirementhandbook.com.au/" target="_blank">here</a>.

Money & Banking

Will Australia become a cashless society?

If things keep going the way they’re going, don’t expect to be hearing the questions “cash or credit” too many times in the future. As Australians increasingly choose debit cards and other electronic systems as their preferred method of payment, a cashless Australia seems less a possibility and more of an inevitability. But what does this mean for ordinary Australians? We’ve taken a broad look at some of the impacts Australians can expect as we move towards a cashless society, so you understand what this means for you and your money.Increased convenience The ability to pay for something with a tap of a card is increasingly becoming a part of everyday life and as this becomes more commonplace it will be an expectation for businesses to facilitate this. Adjunct Professor with the Queensland University of Technology Noel Whittaker says, “I think it is a great thing – especially if it would force small businesses to put more money into the till and put less in their pockets. They don’t understand, that reducing the sales by taking cash from the till reduces the value of the business. Also, cash has a cost for handling, and balancing, and banking.”Increase in credit card fraudAs anyone who’s ever had their money skimmed from an ATM would agree – the fact that we’re not carrying piles of cash around in our day-to-day lives may make us feel more secure, but doesn’t necessarily mean that our money is safer. As we increasingly move away from cash it’s not unreasonable to expect cyber criminals to try and exploit this, which potentially leaves us exposed to fraud. The onus is on lawmakers, businesses, and banks to evolve with this move and create technological safeguards, and for consumers to be vigilant and cautious with their purchases.Budgeting becomes more important I’m sure we’d all agree there’s quite a difference between paying for something by tapping a card against a machine and physically having to take the cash out of your wallet and give it to a cashier. As we move towards a cashless society and transactions become less materially obvious it’s important for consumers to be wary of their bank balances and budget accordingly. This will be especially important for younger generations who grow up in a world where cash is seldom.ConclusionsIt’s important to be conscious of the effects of a cashless society and what this means for the day to day transactions you perform with your personal finances. By understanding these changes you will be able to avoid the risks and enjoy the advantages of living in a cashless Australia. Noel Whittaker is a best-selling author, finance and investment expert, radio broadcaster, newspaper columnist and speaker. One of the world’s foremost authorities on personal finance, Noel recently released <a href="http://retirementhandbook.com.au/" target="_blank">The Retirement Living Handbook</a>. Co-authored with Rachel Lane, this handbook provides expert insight into retirement communities and is available <a href="http://retirementhandbook.com.au/" target="_blank">here</a>.Related links:<a href="/finance/money/2015/10/gst-on-online-shopping/">Are we about to pay GST for shopping online?</a><a href="/finance/money/2015/09/aussie-credit-cards-pay-extra/">Australian credit card holders are paying too much</a> <a href="/finance/money/2015/09/cost-of-living-report/">Cost of living weighs on minds of many Aussies </a>

Money & Banking

Denmark headed for cashless shopping

The Danish government recently proposed getting rid of the obligation for some retailers to accept cash payments, moving Denmark closed to a “cashless” economy. Almost a third of the population in Denmark uses MobilePay, which is an application for smartphones that transfers money to other phones and shops. The proposal as of next year is that businesses such as clothing retailers, gas stations and restaurants should no longer be legally obliged to accept cash. This proposal is part of a pre-election package of growth measures to reduce costs and increase productivity for businesses. It still needs to be approved by parliament and the timing of a vote is still unknown. It’s unlikely that the proposal will meet much opposition in Denmark. It is already common for the population to use debit or credit cards for small payments, such as a package of chewing gum. Finansraadet, a financial institution lobbyist, said that going cashless would save retailers money and time on security and managing change from the cash register. But there are fears that moving entirely to electronic payment may increase the risk of fraud, which have doubled in the past decade in neighbouring country Sweden. Danske Bank, the biggest bank in Denmark and the owner of MobilePay, have taken steps to prevent fraud. They link the app to NemID which is a digital signature linked to the Danish equivalent of an individual’s social security number. Sweden, Denmark and Finland also take the lead in credit card payments per inhabitants in the European Union. Bill Gates, founder of Microsoft, supports the movement towards cashless societies. He argues that due to the low marginal costs, banks would be encouraged to provide services to the world’s poorest. Image credit: Sergey Goryachev / Shutterstock.com

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The move to a cashless society isn’t just a possibility, it’s well underway