Chubb Fire & Security

• Of the 13,000 payments, only 17 were with cheques.
• Back in 1980 at the start of the credit card era, 85% of non-cash payments were made with cheques.
• Having phased out cheques, it’s now looking at winding down the use of cash.

The hidden costs of cheques and cash

• The average cost of everything that had to happen to process a cheque exceeds $5 per payment, mostly borne by banks.
• As recently as 2007, the vast bulk of consumer payments – 69% – were in cash.
• By 2019 only 27% were in cash.

What made cheques so slow and costly

• They they hand it to that person, who then hands it to their bank, which then tries to get the money from the payer’s bank.
• Always expensive, the cost per cheque grew and grew as the number of Australians paying with cheques dwindled to a fraction of what it had been.

How moving cash became a loss-making business

• Although we don’t often think about it, cash costs an awful lot to move, sort and restock.
• The real expense is in moving notes and coins around, keeping them nearby and restocking banks and cash registers.
• Except that the volume of cash they’ve carried has dived 47% over the past ten years, 30% of it during COVID.
• Bank transfers cost a mere fraction of using cash, and pretty soon we’ll be able to use them for everything, via things such as QR codes.

So when will cash go the way of cheques?

• Announced in 2016 by the Turnbull Coalition government, the ban was due to come into force in 2019.
• If Australia wants to ban cash (and ban it for small transactions too – cash is now used less than electronic methods for transactions of all sizes) the easiest solution might be simply to wait.
• Pure extrapolation would suggest cash has less than a decade to go, but it will probably hang around for longer as an (expensive, little-used) backup that maintains privacy.