Rand Low: Cashless society will give us better financial security, fewer germs and smaller carbon footprint

Politician Bob Katter thinks a cashless society will see many people go hungry.

He believes those who aren’t tech savvy, mostly the elderly, will fall by the wayside.

To some extent he is right.

But a cashless society will give us better financial security, fewer germs and a smaller carbon footprint.

As Australia veers towards becoming a cashless society, it’s fair to say the ones who will suffer the most are the elderly, the less educated, and the less tech savvy.

We are already a long way down that path.

It’s inevitable we will go cashless; it’s just a matter of when.

Australia is a small, wealthy highly educated, tech-savvy population.

That means we can afford to provide the education and technology the elderly and the poor may need during financial transitions.

As an idea of how close cash is to becoming obsolete, the Reserve Bank of Australia says only 13 per cent of 2022 payments were in cash, so we are pretty much almost there.

You would probably think it would be higher. But when was the last time you took cash out of your wallet to pay for something?

Currently our transaction spectrum is a hybrid of cash and cashless (paper notes, metal coins, electronic funds transfers, debit/credit cards).

When we do go fully cashless, physical wallets would become unnecessary, fewer germs would be spread via physical money, our carbon footprint by manufacturing money would be reduced, and small business tax evasion would be virtually eradicated.

Further, being cashless means all your expenses are tracked as debits from your accounts; thus, you technically have better expense tracking in hindsight.

In the criminal world cash is often used to facilitate corruption and bribery.

So, it will affect businesses which like to accept cash and under-report their revenues to pay less tax.

We will receive more taxes from them.

That’s not to downplay the effect going cashless will have on some members of society, which is what sparked the comment from Mr Katter about the consequences.

He said he’s fighting to ensure Australians maintain their financial “freedom”, and warned the transition to a cashless society may force some Australians “to go hungry” if they are unable to make payments with a card or digital transfer.

Last year The Financial Review reported the ANZ and Commonwealth Bank were among 14 banks, fintechs and payment companies exploring potential use of, and economic benefits for, a central bank digital currency in Australia.

Fundamentally, the way we transact today uses fiat currency, which is ultimately currency that has value based on the trust we have on the governments and the central banks backing that currency.

I don’t believe we have to go crypto when we go cashless.

Likewise there no reason to ban cryptocurrencies altogether.

What I would advocate is not that crypto take over in a cashless society, but that crypto is made available, as it is now, for individuals to use alongside other central bank digital currencies.

We should educate individuals on the cases and risks, and allow them to use it as a choice of personal freedom.

Dr Rand Low is an Associate Professor at Bond University’s Business School.