Cards overtaking cash

Card scheme operators believe Australian consumers have passed an important milestone in the transition from the use of cash to cards. The amount of cash withdrawn on all cards (debit and credit) in the 12 months to March was less than the total spent on debt cards, for the first time ever.

MasterCard has analysed the latest Reserve Bank payments data and found that cash withdrawals (including withdrawals at ATMs and point of sale terminals, as well as credit card cash advances) have fallen steadily over the past 10 years. In March, the value of cash withdrawals was less than the value of debit card purchases.

As a percentage of transactions, cash withdrawals are now 29 per cent, compared with 30 per cent for debit and around 40 per cent for credit. Credit has remained fairly constant as a proportion of spend in recent years, while debit has increased and cash has fallen.

MWE Consulting said there has been a significant reduction in the average value of card purchases, which suggests that contactless payment technology is helping cards make in-roads into cash.

The average value of a debit card transaction has fallen from A$62 in 2009 to less than $57 now.