Most Australians are ditching cash in favour digital payments and the Reserve Bank says that’s putting pressure on the economics of ATMs and physically moving notes and coins around.

Although the federal government and the central bank are committed to keeping cash as a payment option in Australia, RBA governor Michele Bullock says its declining popularity is posing a challenge.

Speaking at a conference, Ms Bullock said the share of consumer payments made using cash declined from 70 per cent in 2007 to 13 per cent last year.

The number of ATMs and bank branches where people can get money out has already been declining, though Ms Bullock said the distances people needed to travel to access cash “has been little changed in recent years”.

“But this may not be the case in the future if access points continue to decline,” she said at the AusPayNet Summit on Tuesday.

The RBA was keen to maintain “a broad coverage of ATMs at reasonable prices, particularly in regional and remote areas” and was open to hearing from industry on ways the central bank’s regulation could help, she said.

The economics of the distribution system, which includes firms that physically transfer banknotes, coins and credit cards from one place to another, is also under pressure.

The strained economics of this business model was one of the reasons the consumer watchdog approved the merger of the two largest cash-in-transit businesses, although Ms Bullock said the sustainability of the model was still in doubt.

Australia could be considering alternative models, such as a wholesale distribution arrangement, she said.

Poppy Johnston
(Australian Associated Press)