Digital is the new cash
We probably all know someone of a certain age who has a collection of old Australian currency that they delight in telling you about… how many lollies that dirty copper coin used to buy them back in the day, and how useful and superior the old brown $1 notes were.
But don’t laugh… a couple of generations from now, the idea of using actual notes, and coins as we do now, will seem hilariously retro.
Indeed, the end of cash isn’t that far off. Just think about how many things you pay for digitally. And how many financial products you’ve applied for online.
Even applying for a personal loan now doesn’t need to involve actual “personal” contact; you can do it all from your smartphone. Which is also now your wallet. Cash is so yesterday that using it is probably already a meme.
Why is cash being phased out?
Cash may not be dead yet, but the Australian Government is already moving to outlaw it. Laws have been proposed that will make it illegal for people to pay for things in cash if the transaction amount is higher than $10,000. This may lead to fines and jail terms.
The Government isn’t just encouraging us to engage in digital financial management and digital payments, it’s pretty much demanding we do so.
So why does the government want to outlaw large cash payments? To reduce crimes like money laundering or tax evasion.
The whole world is changing to a loose-change-free society
Sweden has pledged to become the world’s first cashless society by 2023, and will have its own form of digital currency in 2021. If you think the locals are unhappy about this in any way, you’re very much mistaken.
The Swedes are so onboard with this modern way of managing debt and expenditure, that they’re already hugely engaged in using FinTech (financial technology).
In 2018, just 13% of Swedish nationals reported having used cash for a recent purchase, which is down about 40% from 2010. Buses and trains no longer take cash in Sweden, and the national rail company is encouraging people to start storing digital tickets on microchips that are inserted into their hands. Yes, really.
The country’s capital, Stockholm, is particularly gung-ho about not using cash, and most people either buy everything using the nation’s most popular mobile-payment app, Swish, or by credit card. Even IKEA is trialing its first cash-free store.
How much do you really use cash anyway?
Of course, your first reaction to the news of the demise of cash is likely to be mild panic, perhaps even tapping your front pocket to make sure you’ve still got change on you. Or perhaps not, because some people are already living entirely cash-free lives here in Australia.
If you think about the way you used to pay for things, five, or even 10 years ago, it’s easy to see how quickly things are moving in the area of digital payments and digital financial management.
There was a time when buying a single coffee with your credit card would have seemed absurd, and a little embarrassing. Indeed, it seemed like every second shop had signs advising of a $10 minimum purchase for EFTPOS or credit-card transactions. In most cities, at least, you now wouldn’t think twice about getting a couple of coffees with a tap and go.