Physical use of cash declines, but many Tasmanians 'stick to cash', argue against cashless society

But community opinion on whether society should go cashless remains divided.

While some in commerce believe cash is on the way out, others from small business firmly want it to stay, and in the social arena, a divide exists between the young and old.

The RBA, in its review of banknote distribution arrangements, said that the total value of banknotes in circulation as of three months ago was $100 billion, which had doubled in ten years.

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It said more than 70 per cent of these notes are either $50 to $100 banknotes, and more than three quarters of all notes are thought to be stashed away by Australians.

"Physical cash is being used less as a means of payment," it said.

"Declining transactional cash use can be attributed to the growing role of cash for precautionary and store-of-wealth purposes."

Tasmanian Chamber of Commerce chief executive Michael Bailey said cash is no longer king.

"Not only did COVID force many businesses to move to cashless payment, it made the public think twice about where their cash might have been," Mr Bailey said.

"There will always be a place for cash, but the reality is that we're living in a digital, online world and we will need to adapt to that."

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But Australian Economic Society state president Paul Blacklow stressed there was no need to go cashless yet.

Mr Blacklow said while younger generations preferred electronic methods of payment, older populations were more likely to "stick to cash".

He added that while the pandemic had pushed Australia closer towards becoming a cashless society, he predicted cash would still be circulating for at least the next 20 years.

"Many people like the privacy and anonymity of cash. Some people feel safe knowing they have the cash available as it gives them a sense of security. There are many who use cash to budget. They keep a certain amount of cash out when they get paid and use that as their allocated amount to spend.

"You can do that with electronic banking, by allocating money to certain accounts, but it is not quite the same, and some people just don't like using a credit or debit card."

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Mr Blacklow said the trend of holding onto cash "for a rainy day" was a bad idea when inflation was high, but added that inflation had been minimal over the last decade.

He said one of the main arguments for cash came from the black economy, where cash is used in illegal transactions.

"Going cashless may be a way to minimise that," he said.

Small Business Council of Tasmania Robert Mallett said any benefits to business by going cashless were minimal.

"It is the basic unit of currency. Not everyone has the capacity, means or intellect to be able to manage credit cards or debit cards...cash cannot go away, it must never ever go away," Mr Mallett said.

"To some degree the government and tax man would love to see a more cashless society, one where electronic transactions are the norm, and where it is harder to defraud the tax man.

"But...it doesn't make sense to be moving toward a cashless society in the near future."

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