The Tyro Blog

25 July 2016 - 5 min read


Australia as a cashless society is on the cards

With our love affair with Tap & Go only deepening and the recent push of mobile contactless payments like Apple Pay, the lucky country could soon be known as a cashless one.

Have you noticed your wallet feeling a little lighter these days? While we used to depend on cash for everyday costs like your morning coffee or bus ticket, cards are being used for more transactions every day. This is largely due to the rise in popularity around contactless payment technology (or Tap & Go) in recent years.

We’ve seen this as the use of cash has steadily declined in Australia and around the world over the last five or so years. A 2013 cash survey conducted by the RBA showed that only 47 percent of transactions involved cash, down from 70 percent in 2007. Meanwhile, the use of contactless payments in Australia has risen by 60 percent in the last year alone. More and more, the idea of a cashless society is becoming a reality.

With the launch of mobile contactless payments, a cardless society could also be on the cards. In the last 12 months alone, we’ve seen the launch of Apple Pay with American Express (and now ANZ), Samsung Pay with Citi and American Express. Android Pay was also just launched by Google with more banks than Apple or Samsung, which will undoubtedly ramp up the use of mobile payments Down Under.

NB: Tyro terminals take payments from all major EFTPOS, credit and debit cards including those via Apple Pay

Currently only three banks in Australia offer Samsung Pay or Apple Pay, though many also offer their own internal payment systems in their Android apps. It’s only a matter of time before most (if not all) of the major Australian banks jump on Apple, Samsung and Android Pay, though. In the week following ANZ’s Apple Pay launch, the bank saw online applications increase by 20 percent. With this type of profit, major banks would be foolish not to follow suit, even if they already have their own internal apps. Last month, the Westpac Cash Free report found that 79 percent of Australians think that using your smartphone to make payments will become the norm. But does this mean that we’ll be getting rid of cash altogether?

To get an idea of what a cashless Australia could look like, we can look at Scandinavia, where Denmark, Sweden and Norway are leading the cashless society trend. For example, in Norway, just 6 percent of transactions are made using cash. China is another example of a country that has embraced cashless payments. Currently, mobile payments make up 70 percent of the nation’s e-commerce transactions.

While there’s no denying that contactless payments are growing in popularity, will we be saying goodbye to coins and notes anytime soon? Many disagree, with some parties pushing against the contactless payments movement. In Austria, the Deputy Economy Minister Harald Mahrer proved this after he demanded that the citizens be given a constitutional right to cash.

One of the major concerns in the against camp is the breaches to security that are posed by the presence of digital payments. In a world where almost everything we do is tracked in some form or another, cash is one of the only ways we can make payments in private.

With reports that personal credit card fraud has risen in 2016, people aren’t being needlessly paranoid. According to an RBA report, there were 1.89 million fraudulent card transactions in the 2014-2015 financial year. Worth $405.6 million, this is up from the $344 million worth of fraudulent transactions in the previous financial year.

While these fraudulent transactions have risen in parallel with the increase of digital payments, contactless payments are generally quite safe. Tap & Go payments are protected by EMV chip technology and most card providers (such as Mastercard® and Visa) offer zero liability policies that rid cardholders of responsibility if a card is stolen and used for fraudulent transactions. Mobile payments have also been protected with similar security. Rather than your phone holding the card’s information, it’s given a unique device account number which is encrypted and stored in a secure chip on your phone. When you go to make a payment, the device account and a transaction-specific security code is used to approve the payment.

Apple Pay and Samsung Pay also offer options to wipe your phone of these encrypted details through an online account, so that you can disable the contactless payment feature if your phone is lost or stolen. While banks and phone providers have these security measures in place, the best way to keep your finances safe is common sense. Protect your phone with password PINs or fingerprint security technology and make sure you’re across the processes available if your card or phone is lost, stolen or damaged.

With these security concerns aside, most Australians are jumping on the contactless payments bandwagon without looking back. While we may not lose cash or coins in the near future, a predominantly cashless society is quickly becoming a reality in Australia. Plus, in a time-poor world that is constantly looking for shortcuts to convenience, anything that simplifies our everyday duties is likely to catch on.

Sally McMullen writes for

Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
Apple and Apple Pay are trademarks of Apple Inc., registered in the U.S. and other countries.
Google and Android Pay are trademarks of Google LLC.

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