The End Of - Money ?

You need to be old to remember how it used to be.   The banks opened on the dot of ten in the morning, and they slammed their doors shut at precisely three in the afternoon, Monday to Friday.  Most people had a " Savings Account " with a cute little book that provided a record of their deposits and withdrawals and only the wealthy had a cheque account.   Cash was king and those that failed to get to the bank on Friday spent a miserable weekend with an empty wallet.

Those were the days when Australia had a dozen or more banks which seemed to have a branch on every street corner.  Many oldies will reminisce about getting stuck in the bank queue when a local merchant chose to bank the days takings and the  teller seemed to be endlessly counting small change.

Early in the 1980's the banks pulled a shabby trick on the public.   They announced that they had better things to do with their capital than own branches and offered them for sale - with a five year lease and an option for a further renewal.   Many thought this was an ideal way of securing their retirement money because the banks would continue to rent - forever.

Suddenly the banks began to close branches - and replace them with the ATM.   A funny looking electronic gizmo set in a wall that was loaded with cash.  The customer needed to insert an access card and enter a PIN and with the push of a few buttons this machine disgorged the requested amount of cash money.   You actually got charged an additional fee to enter any of the few bank branches remaining to access cash and the ATM provided a 24/7 service.    The public griped when the service was down or when the machines ran out of cash.

It seems that the days of the ATM are drawing to a close.  The day of the debit card and the transition of the credit card onto items such as Smartphones has sharply lowered the number of cash transactions in play.   When we buy a cup of coffee or pay the hairdresser all we need to do now is tap the phone or the card on the terminal and the payment is transferred automatically from our bank account to that of the merchant.  No need to remember a PIN.  No hassle to enter a card and select the account to which the transaction will be debited.

ATM withdrawals are now at the lowest for fifteen years.  In January they fell by another 7.7% compared with the same period last year and this trend is expected to increase sharply.  As a consequence, we can expect the number of ATM'S to start falling in tandem with lesser demand for their services.

At the same time, the amount of " cash out " money being withdrawn from store terminals when debit cards are used to pay for purchases is also falling sharply and the average credit card balance across Australia has declined by $ 84 to $3083.20 in January.   The message is clear.   The use of banknotes and coin is fast diminishing.

Later this year this trend will accelerate when the Reserve Bank of Australia  ( RBA ) rolls out a new real time payments platform that will do away with BSB numbers to identify bank branches and account numbers to identify accounts.  All that will be replaced with a uniform, simplified electronic payment system.  It will do away with that hated " three working day " interval gap when funds are transferred between banks.

The likely outcome will be a multiplication of merchants who decline to be paid in cash, or who demand a price premium for cash payments.   The banks are now reluctant to count coin and they demand that fee charging cash transport companies collect and count shop takings rather than process them at branches.   We are fast reaching the stage where the processing of cash money has become an expense that is avoided when customers use an electronic payment method.

Before the end of this century we may see the day when wealth is a figure recorded on a hand held video screen.   The day of it becoming actual reality in the form of banknotes and coin will have ended !