Cashless Australian Banks on the Increase By James Reed
CommBank, NAB and ANZ making some of their branches cashless and Macquarie Bank has announced that its cash services would be phased out entirely by 2025. At a government inquiry the boss of the Commonwealth Banks said that there is a decreasing demand for cash, and that “transporting and making cash available around our vast country involves the considerable expense of logistics and security.” Customers are paying about $ 40 each per annum to keep cash in circulation.
First, I think we need some statistics other than from the banks about the decline of cash. Go into any supermarket, and yes, some people pay by card, but most pay by cash, so I doubt this. Second, if customers are paying, what is the big boss worrying about? Yes, they have come a long way from the early ideals discussed by D. J. Amos in The Story of the Commonwealth Bank:
https://veritasbooks.com.au/products/the-story-of-the-commonwealth-bank-d-j-amos
And $ 400 million I not much compared to the $ 10.2 billion record profit that the bank has made:
“The boss of Commonwealth Bank has told a government inquiry that continuing to make physical cash available to Australians costs the business $400million a year despite less and less customers using it.
Matt Comyn said this week that 'transporting and making cash available around our vast country involves the considerable expense of logistics and security.'
His comments follow CommBank, NAB and ANZ making some of their branches cashless and Macquarie Bank announcing just days ago that its cash services would be phased out entirely by 2025.
Numerous concerns have been raised about Australia shifting to a cashless society including an increase in fees syphoned off with each tap-and-go, certain groups falling behind in the switch, and reduced privacy as every transaction is logged.
But Mr Comyn said CommBank's 10million customers were paying roughly $40 each to fund the $400million expense to keep physical cash in circulation in it's branches.
'Many of our customers don't use cash and these customers cross-subsidise those that do,' he said.
He and the other three bosses of Australia's 'big four' banks were this week grilled at Parliament House in Canberra by a Senate inquiry into rural and regional branch closures, amid accusations banks are abandoning country areas.
The inquiry is being run by the Senate committee on rural and regional affairs and transport which is chaired by Queensland Senator Matt Canavan.
Mr Comyn told the inquiry that as demand dwindles for cash, in-person bank services and ATMs they were becoming increasingly unprofitable for the business.
'It becomes unsustainable to invest substantial resources keeping expensive services that fewer and fewer customers use,' he said.
'This is important given the speed with which customers are changing how they bank with us.
He said that five years ago, 43 per cent of all point of sale transactions were cash but that today that figure is around 15 per cent.
He said in contrast customers transact more than $18 billion through the CommBank app, which is an increase of 64 per cent in just two years.
He added that the bank had no plans to remove cash entirely.
'I don't think that that's feasible, and I don't think that would be desirable,' he said.”
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