Paper-based payments fading away

Bernard Kellerman
Australia's transition away from paper to the digital economy has been underlined in the latest "Milestones Report" from the Australian Payments Clearing Association.

The report shows that cheque use in Australia dropped 13.9 per cent in 2014, compared to an 8.8 per cent increase in the use of payment cards and a 15.2 per cent increase in direct debits and credits.

This decline in cheque use should come as no surprise, as the trend has been underway for over a decade. A comparison between the months of December 2002 and December 2014 shows a 71 per cent drop in cheque use, according to APCA.

The other major trend affecting cheque use, one that has been apparent for some years, is for the majority of cheques to be increasingly applied to high value business transactions, such as superannuation transfers and property settlements. Hence, the total value of cheques increased slightly, by 0.7 per cent.

This compares to a 6.2 per cent increase in the value of card payments and a 13.6 per cent increase in the value of direct entry payments.

Nevertheless, even these specialist uses for cheques are gradually being whittled away by more efficient automated systems, such as introduction of electronic conveyancing for property settlement through the PEXA service.

The payments report, published twice-yearly, also shows that consumers are using less cash. In 2014, the number of ATM cash withdrawals dropped by 4.8 per cent and by 2.1 per cent in value to A$143 billion.