It seems that cash may no longer be king. The Reserve Bank of Australia’s statistics show the rise of a cashless economy, with physical money accounting for just 47% of consumer payments in 2013 – a heavy fall from 69% in 2007.
The RBA believes that the use of cash alternatives such as contactless cards and mobile payments will continue to increase, particularly when the RBA’s new consumer interchange standards for merchants kick in on July 1.
The charges, capped at 0.8% for credit cards and 15 cents for debit cards will encourage more merchants to accept card payments for low transaction values. For the customer, this translates into a less likely encounter with the irritating “EFTPOS minimum” or “Card surcharges” signs when paying at the counter.
But there are other reasons which have been influencing merchants to go cash-free, even before it becomes cheaper to do so. Tyro co-founder, Andrew Rothwell says it comes down to three major factors:
For one of Tyro’s merchants, Cannings Free Range Butchers in Melbourne, the decision to go cashless came down to hygiene. Ditching cash at the counter meant that the butchers could avoid handling coins and notes, which are often crawling with pathogens like E.coli or staphylococcus bacteria, in order to provide a safer and more hygienic experience for customers.
For many pop-up stores or market stands who could be collecting up to thousands of dollars in cash every day, safety can be a major issue. Going home with a large amount of cash leaves you feeling vulnerable and there is a lot of potential for things to go wrong. Taking an EFTPOS device home instead gives many business owners piece of mind and helps avoid any unpleasant incidents.
Accepting only EFTPOS transactions saves businesses valuable time which is otherwise spent counting up cash and going to a bank branch to make a deposit. This can be very time-consuming for business owners, particularly if their daily bank visit requires them to close up shop. EFTPOS-only eliminates human error and is more convenient for everybody involved.
Mr Rothwell said he expected card payment surcharges and minimum EFTPOS transactions to become less common once the new RBA laws are put into effect, and also as competition fires up among small businesses. He believes that “cashless payments will become more and more frequent.”