Consumers hear a great deal about the projected demise of cash and paper cheques in the new digital payments world. The Reserve Bank of Australia (RBA) Governor, Philip Lowe, has even talked of cash becoming a “niche payment instrument” while banknotes will be “used for relatively few payments”.
It’s a decent niche: Australia has over $A76 billion polymer banknotes in circulation, the vast majority (93 per cent) by denomination accounted for by the $50 and $100 notes, according to the RBA.
“Countries with different cultures and experiences reveal why and how cash remains a useful and ever-popular payment option.”
However this disconnect between forecast and reality in payment trends is not confined to Australia. Other countries with different cultures and experiences can also reveal why and how cash remains a useful and ever-popular payment option.
Take Canada which demonstrates the ongoing attraction of cash for those who wish to avoid surveillance of their activities by authorities.
Canada was the first major developed nation to legalise the ‘over the counter’ purchase of cannabis in late 2018. Research by the London School of Economics (LSE) revealed the number of circulated banknotes in Canada fell sharply after the new legislation passed.
The LSE argued this was because cannabis consumers no longer needed to pay with cash in the ‘shadow economy’ to avoid detection and possible prosecution for their purchases.