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Cashless society hitting those least able to pay

By Ross Hamilton

I first heard about a cashless society back in 1980 when I started work for the Commonwealth Bank. Our manager returned from a conference, informing us that the wheels had started turning to make Australia a cash-free society in as little as ten years. Thirty-seven years later, and a long time after the end of my banking career, it seems we are finally getting very close to that point of cash becoming a thing of the past. But so far, I am not seeing anyone talk too much about the very real negative that can come with this unless a government finally steps up to the plate for real for the first time.

The amount of cash used in the Australian economy will have been on the decrease the last few years with the continuing growth in eftpos including the maturing of the ‘pay-wave’ technology. The more we use those technologies, the less we need cash. But at what cost?

The Reserve Bank is about to introduce innovative technology which will make money transfers happening almost instantaneously, and, so the argument goes, we have less need than ever for the plastic folding stuff. And it can be argued that removing cash from society saves us the cost of producing it.

The pretty bits of plastic we currently use to pay for a steak sanger at the pub for lunch will be replaced by electronic transactions via the banks. And what shall the banks do? Continue racking up more fees for us all to pay. The big four banks in Australia already make literally billions in profit each year. And a massive part of that profit comes from all the fees they charge. The interest on your loans just essentially pays the bills. It is fees that create those obscene profits.

Banks have it down to a fine art – charging for anything and everything. The frequent excuse is that they are just recovering costs. And that is complete garbage. Are we really expected to believe that it costs a bank two-dollars or more to automatically process an electronic ATM withdrawal for a non-customer? Of course it doesn’t! It is a punishment fee for daring to not be that bank’s customer and adding to the pile in their Scrooge McDuck Money Bins.

What is going to happen once cash is removed from our grubby little hands? Everything becomes simply transactions on our credit card or bank account. And what will banks do in response to that? They can be relied on to keep charging fees which reflect the amount of transactions on accounts. Dumping cash in favour of an all-electronic system shall mean a drastic increase in the amount of transactions. And that means a massive bonus in fees for the banks and profit levels that could simply dwarf the current huge profits.

Now we come to the big crunch. Who is going to be paying all those added billions in fees? We are. Every single person in the country stands to have their transaction fees on their bank accounts simply soar. But a five cent, ten cent, one or two dollar fee to someone on current average wages of almost $80,000 pa (latest ABS data) is not as hard as it is to someone on a bit over $20,000 pension. These fees are not equitable according to capacity to pay. Yet the only way of opting out–paying as much in cash as possible–will be replaced by significantly increased costs on those least able to afford them.

This problem is nothing new. But no matter what political flavour our governments are, they all simply let the banks keep on their merry way. The problem is always shoved back into the Too Hard pile to be ignored. And that is before factoring in the massive bonanza coming their way in the cashless society which the RBA say we could be seeing as soon as 2020. In three years time, the low-income earners could be hit with a massive ‘tax’ payable to the banks.

No, Malcolm, the banking CEOs are not trembling with fear at the prospect of the annual visit to a completely pointless and powerless Senate committee. They’re laughing about it over Cuban cigars and Penfold’s Rare Tawny in a private club somewhere, courtesy of their millions in bonuses, all paid for by we poor schlubs. But if the RBA are correct and the cashless society could be on us by 2020, the buck has to stop with the Turnbull government right now. You have to do something meaningful which shall significantly ease the burden on those least able to pay, before it is too late to do anything. How about limiting the amount banks shall financially benefit from the cashless society bonanza? It would be a damned good start.

This article was originally published on Ross’s Rant.


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  1. Matters Not

    Ross – in a nutshell – is the problem with the ‘cashless’ bit (which I think is a great idea – a full wallet does nothing for my bodily profile) or the ‘way’ it’s being manipulated via unnecessary fees and the like? Just askin …

    Let’s not throw the baby out with the bathwater?

  2. wam

    8 decades without a card from a bank,
    We were overseas and the plane broke down stranding us in singapore.
    In those days our pay cheques were sent to the commonwealth bank.when we rang to get an advance the bank said no. all 15 in the group closed our accounts and went to the credit union. Still nearly 50 years later there are no banks in our lives.
    The trauma for the poor in a cashless society is the variable speeds of the bank INSTANT for the bank deliberately protracted for the customer. When the banks win the cashless lottery there will be no pensioner who will escape the embarrassment of ‘insufficient funds’, The the trauma of waiting days or weeks for a bank johnnie to correct the error.

  3. Matters Not

    wam re:

    8 decades without a card from a bank … nearly 50 years later there are no banks in our lives … speeds of the bank INSTANT for the bank deliberately protracted for the customer … The the trauma of waiting days or weeks for a bank johnnie to correct the error.

    I think the (technological) world has changed,

    Give it another try? These days you can even ‘do it’ online.

  4. Alistair

    The aim is to have every transaction, however small, done through an electronic system and for the banks therefore to take a slice of every single transaction across the entire economy. In the same way as an older colleague once told me about wage rises when I was a callow youth, ‘100% of sod-all is till sod-all’, 0.1% of all the transactions in an economy is a bugger of a lot.

    Spending cash rather than using credit is probably one of the most radical things you can do in contemporary society.

  5. Jeff

    And what happens in times when the online services go down or a power outage hits, or a major natural disaster like a cyclone strikes and leaves towns without power for days or more? What does one do in an electronic cashless society then when they need to make a financial transaction?

  6. Keitha Granville

    There is a place for both, and both must be retained.
    The LNP are never going to do anything to limit what banks charge for their “services”.
    These days if you go into a branch there will be someone “helping “you to use the ATM so they can cut back on tellers.
    I do most everything online, but I am still vexed that whilst my dollars leave my account instantly they don’t appear in the recipient account until sometimes 48 hrs later. If they can stop that little money making venture and make it INSTANT I will be happier.
    But I still plan to have a bit of folding in my purse. You can’t pay-wave a few dollars into a homeless cup.

  7. Harquebus

    Everyone will be forced to be a bank customer. We will also be encouraged to spend; negative interest rates and holding fees. Transactions will be restricted to approved businesses.
    A few more power outages which, are probable should put a dampener on the idea.
    My local shop had to close for a day recently when, a software license expired rendering their tills useless and the vendor could not be contacted because, it was a Sunday.

  8. ausross

    Matters Not – it is the manipulation that shall occur.

  9. Matters Not

    ausross re

    it is the manipulation that shall occur.

    Not sure the meaning you intend I should give to that statement. Did you choose to use ‘shall’ rather than ‘will’ deliberately? And if so, then consciously claiming that the manipulation is a ‘given’, an ‘imperative’ and beyond other possibilities – legal or otherwise?

    Please explain.

  10. Ian

    IF bank fees are charged on a per transaction per means tested basis, then go for it. Knock yourselves out you banking bastards. But will this ever happen. Not in a million years.

    Cue stage left the ubiquitous ATM machine. Those with little funds get hit the same amount for a ‘transaction fee’ as one who has thousands, so if you are on your last $15, not only do you get hit with that transaction fee, but most likely a denial fee on top (because of the $20 minimum) and thus a MUCH higher percentage of available funds goes to the financial institution’s coffers.

    ALL fees, and I include fines, overdrawn fees, rates notices, tickets (as in those issued by the constabulary) &tc should be charged according to the available balance in the receiver’s account(s).

    And don’t ever tell me this can’t be done almost instantaneously, because it can.

    It’s just our regulators are so far up the bank’s collective clackers that all they ever really give a shit about …. is themselves.

  11. Bryan

    Let’s get rid of all cash and all the current taxes!
    Then replace it with a electronic payment system for every transaction which can be monitored! And pay 22% GST on each purchase!
    The consumer will save money and the state and federal government will make more revenue. Everybody wins!

  12. jim

    Banking probably wouldn’t interest many, unless it’s personal or you care for ethics ,Labors policy on banks.

    “We want to see the banks play by the rules, make sure middle and working class Australians get a fair go and restore confidence in our financial system”.

    That’s why Labor is calling for a Royal Commission into banking and financial services.

  13. etnorb

    I say NO to ANY form of a cash-less society! I WANT to be able to pay for any purchases, pay bills etc with my own cash, & not have any one of these bastard so-called “banks” (sic) taking ANY percentage of what I pay or spend. I insist on only getting my bills sent to me–which already has a “fee” (?) added to my bill-so there is no way that I would want to have NO cash in my wallet to pay my bills etc with! The sooner a Royal Commission is instigated into ALL these banks the better!

  14. Mick Macson

    LABOR started the No Cash Pay in 1984 … before then you didn’t NEED a bank account. I tremember WELL the Pay Truck coming around onsite.

  15. Matters Not

    remember WELL the Pay Truck coming around onsite.

    So do I. And I hope (and know) we aren’t going back to those days.

    These days I can do my banking online. Pay bills and the like. Also I don’t have to rub sticks together to generate heat. Nor light. Nor do I have to catch fish with my hands nor club …

    Not sure what word to use – but the concept of ‘progress’ might be a starting point?

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