Back in 2015, Westpac released its Cash Free Report, which predicted Australia would be a cashless society by 2022. We’re almost there, and it’s only 2018.
Australia has the fourth highest number of non-cash payments per person in the world. According to the Australian Payment Network, that number was 8.3 billion card payments in 2017 – around 65 per cent of all transactions – up from 4.8 billion in 2012.
It’s inevitable that Australia will soon join Norway as a cashless economy. The deputy Governor of Norway’s central bank expects cash to disappear globally within 10 years.
So is your business already cashless? Or are you hanging on with physical money? It’s essential that businesses embrace cashless now.
Following the release of a recent study on cashless payments in Australia, ATO Assistant Commissioner Matthew Bambrick said, “It’s clear that there’s been a cultural shift towards cashless payments across the board, even for smaller amounts.
“The trend away from cash will only gather pace. This is more than a passing fad. This is the way of the future.”
If your business is still hanging onto cash, consider upgrading your digital payment capabilities and prepare for the inevitable phase out of cash payments. The revolution will only continue.
Inter-bank transfers are now instantaneous
In February, the major Australian banks rolled out the New Payment Platform powered by BPay’s Okso system. It allows almost instantaneous transfers between participating banks, a process that previously took several business days.
The major Australian banks have branded the service PayID, and it requires a phone number, email address or other identifier to facilitate the transfer. Some banks are allowing businesses to use their ABN/ACN numbers as PayID identifiers, and others are on their way to doing so.
This is a positive, because currently a person’s phone number can only be used for one PayID account. Using an ABN allows the business owner to retain their phone number as a personal PayID identifier.
The banks advise businesses that the new system will help businesses manage cashflow better, reduce payment errors and improve reconciliations.
Embrace total integration
Going cashless means businesses can save substantial time and money on bookkeeping; there will be no more counting cash and manually recording the payments. Accounting software such as Xero and MYOB can be plugged into your point of sale devices and will automatically categories payments and keep your books tidy.
Be cashless or be square
Even market stalls, the previous bastion of cash, are going cashless. New tech such as Square, a tap’n’go card reader that can be powered by a smart phone, has made digital payments affordable to even micro businesses – the technology is available for less than a $20 upfront cost.
Steer clear of dirty cash
Cash is literally filthy- it is covered in bacteria, viruses and other nasties. Going cashless is a boon for quick-service restaurants, as staff no longer have to handle cash, which generally means continually putting on and taking off plastic gloves if the server also handles food. It’s a massive benefit for the hygiene and cleanliness of your business.
Don’t alienate young people
Young people are far more likely to use digital payment methods. People under the age of 35 carry the least cash of any age group, according to the latest ATO study. Young people are also far less likely to ask for discounts on products for paying with cash, another benefit for businesses.
There are drawbacks
NAB suffered a lengthy outage of its electronic services that lasted from 7.50am-2.30pm on 26 of May, leaving thousands of business and individual customers unable to use digital payments or ATMs for almost seven hours during the week’s busiest shopping period. At the time, NAB said it would be compensating customers.
If and when Australia goes entirely cashless, the pressure will be on the banks to ensure these outages do not happen. And when they do, they will be costly. The maintenance of these payment systems will also be a national security issue. Ensuring the reliability and security of our national payments system is already of the utmost importance.
Let MWM help you go cashless
The cashless revolution is unstoppable. Don’t be left behind. MWM Advisory can help your business find the best bookkeeping software and integrate it with your payment system. In fact, we will manage the whole process so that you can focus on running your business.
Call MWM Advisory on (07) 5596 9070.