NAB CEO Andrew Irvine has floated the idea of surcharging cash payments, and as chair of the Australian Banking Association he must speak for many in the industry.
Irvine said “in Australia, cash is viewed as free and digital payments are viewed as having a surcharge.
“This is actually the wrong pricing signal because the cost of a digital payment versus a physical payment is much, much lower,” Irvine said.
“Think about it, you have two people in an armoured car driving around a country that is thousands of kilometres in size, moving cash.
“The facts are the number of runs that these trucks are making is smaller every month and the use of cash is declining.
“That’s a problem we’re going to have to solve, but we’re intent on solving it and we know that it matters to Australians.”
So Irvine did not explicitly say that he and NAB were advocating for a surcharge on cash payments, but this seems a reasonable inference.
NAB has not said what its costs of cash distribution are, but each of Commonwealth Bank and Westpac (which have larger branch networks than NAB) have put these costs at in the order of $400 million annually.
Irvine joined ABA CEO Anna Bligh in a panel discussion at the Trans-Tasman Business Circle’s Annual Economic Forecast event on Friday.