“The use of physical cash for day-to-day transactions has been declining for many years,as consumers switch to digital payment alternatives. The COVID-19 pandemic further accelerated this trend,” the RBA said.
The Reserve issued $3.1 billion worth of notes in the 2022-23 financial year,about a third of its normal level.
The reduction in cash is being reflected in the falling number of ATMs and EFTPOS outlets.
Data collated by the Australian Prudential Regulation Authority shows the number of ATMs fell another 11 per cent over the past year to fewer than 5700.
Since mid-2017,ATM numbers have crashed by 59 per cent. The biggest falls have been in the ACT and Western Australia (down 65 per cent in each jurisdiction),while they have more than halved in NSW (58 per cent),Victoria (54 per cent) and Queensland (61 per cent).
The number of EFTPOS outlets has also dropped,edging below 700,000 this year. Since mid-2017,about 100,000 EFTPOS points have gone.
RateCity research director Sally Tindall said while most banking services had moved online,there were still people who wanted cold,hard cash.
“Cash is no longer king,but it’s not dead in the water either,” she said.
“RBA statistics show over $8 billion is withdrawn from ATMs across the country every single month,confirming we’re not a cashless society just yet.”
Despite the fall in cash usage,there are still almost 2 billion banknotes in circulation.
The Reserve Bank revealed it had processed 8900 claims and made $14.3 million in payments to people who had brought in damaged banknotes.
Of those,130 claims worth $9.6 million were for notes damaged during floods that swept across much of eastern Australian in 2022. Most of the notes came from businesses and financial institutions.
The decline in cash,and improvements in the quality of the notes in circulation,is helping one age-old problem with notes. The RBA said the level of counterfeiting fell to its lowest level in almost 20 years in 2022-23.
The Reserve said almost 10,000 counterfeit notes,with a nominal value of $800,000,were detected. This is a counterfeit rate of about five counterfeits per million notes in circulation,well below the 20-year average of 12 counterfeits per million.
According to the Reserve,the drop in counterfeiting reflected strong policing and the dominance of the bank’s new generation of high-security banknotes.
Expert tips on how to save,invest and make the most of your money delivered to your inbox every Sunday.Sign up for our Real Money newsletter.