Where do you keep your money? Is it largely kept on your payWave card or even on your smartphone?

As digital payments continue to gain in popularity, Citi’s retail branches will no longer handle cash because the bank says it is a service used by less than 5 percent of its customers.

Citi’s branch network is not extensive, but the move is emblematic of what is happening in the Australian economy.

According to the RBA, in 2010 cash accounted for 62 percent of all transactions in Australia.

That has not fallen to below 50 percent and research house RFI is forecasting it will fall to 43 percent by 2018.

Its easy to understand why the taxman wants to get rid of cash – he’ll be able to track money and help cut out the grey and black economy.

It will be good for corporates too, because they won’t have the cost and risk or handling cash.

But what about the consumer? Here’s some pros and cons:

  • Service costs could increase because you won’t be able to tip
  • Cash for odd jobs, like mowing the lawn, will become almost impossible. Are we going to swipe cards for the Boy Scouts?
  • Cash deals at major retailers, like the Good Guys, will be history


  • Banking – in theory – should be cheaper because of lower labour costs. That’s the theory anyway.
  • Queues at stores could disappear, you will just wave your card and a shop assistant will have a mobile device to record payment. That will save you time, if not money
  • Wallets will be smaller and won’t bulge in your pocket, so you’ll look smarter.

Events this month in India show where Australia might be heading next.

Digital payment providers in India reported a 250 percent spike in business in the wake of the Government decision to retire the 500 and 1000 rupee notes.

The official reason for this is to combat the black economy and fraud, but a main consequence has been to accelerate India’s move to a cashless economy, where cash services are provided not so much by banks, but by telecommunications companies.

In Australia, the $100 note has been called the “Grey Ghost” and now the “Green Ghost” because it is seldom seen.

But if, it is claimed, you are involved in a dodgy transaction as you attempt to elude the taxman or purchase contraband goods, you are much more likely to see an Aussie $100.

Apparently there are three times as many $100 notes in circulation as $5 notes, and more than 90 percent of all the currency in circulation – by value – is in $50 or $100s.

The theory is that getting rid of the “Green Ghost” will reduce crime, increase tax revenue and reduce welfare fraud.

It would also accelerate the momentum towards a truly cashless society.

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