The share of consumer payments made using cash has dramatically decreased from 70% in 2007 to just 13% last year1. This shift is driven by the increasing adoption of digital paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More methods, which offer convenience and efficiency. The decline in cash usage is not just a statistical observation; it reflects a broader societal changeThis is the action by which certain banknotes and/or coins are exchanged for the same amount in banknotes/coins of a different face value, or unit value. See Exchange. More that is reshaping the economic landscape.
The reduction in cash usage disproportionately affects vulnerable communities, including lower-income households and those in regional areas. These groups often rely on cash for daily transactions and may face challenges in accessing digital payment options. Bullock acknowledged that the withdrawal of cash could exacerbate financial exclusion for these communities, highlighting the need for inclusive financial solutions.
The declining popularity of cash poses significant challenges for the infrastructure supporting its distribution. The number of ATMs and bank branches has been decreasing, putting pressure on the economics of maintaining cash access points. Bullock stressed the importance of preserving a broad coverage of ATMs, particularly in regional and remote areas, to ensure that cash remains accessible to those who need it1.
In 2024, the Treasury has moved toward two significant policy shifts to support access and acceptance of cash. The first is a consultation to mandate cash acceptance by retailers which has been completed on 14 February 2025. The second is a proposed levy on banks to support regional branch and ATM banking. These moves are the latest in a tumultuous year for participants in the cash ecosystem. `
One bank appears to be going against the trend of closing branches and ATMs. Commonwealth Bank CEO Matt Corbyn has written to customers declaring the physical cash was “here to stay”, reports yahoo. “We’ll continue to distribute more than $4 billion in cash each month through Australia’s largest branch and ATM network, which will also benefit from $100 million in upgrades in 2025,” Comyn told customers. “We have extended our promise to keep all our regional CommBank branches open until at least 31 July 2 027 to Central Banksupport communities and jobs in regional Australia.” The bank previously revealed it had spent $410 million in the last financial year providing cash services across the country.
To address the challenges of cash distribution, Bullock suggested that major banks and other users of banknotes and coins should bear more of the costs associated with moving cash around. She proposed exploring a “co-operative model” for cash distribution, which could help share the financial burden and ensure the sustainability of cash services.
“The key issue is that as use of cash for transactions declines, it is becoming more expensive to store, process and distribute cash around the country. At present, we have a single firm, Linfox Armaguard, that provides these services and it has experienced financial difficulties because the revenue it is receiving for these services is not meeting its costs. In response, in June 2024, an industry support package of approximately $50 million over 12 months was agreed between Linfox Armaguard and its major banking and retail customers.”
The industry needs to find a long-term solution to make sure cash is available.
“At the moment, we’re trying to solve the short-term issue, to make sure the cash is available … that people can use it, that people can access it,” Bullock said. “But we’ve got to think that cash is going to be around probably for another 10 years, and we’ve got to find a way of moving to a new system that means that distribution of cashActivity consisting of the delivery of cash throughout the territory in the amount and modality required to adequately cover the needs. It is one of the central bank’s core functions, for which the necessary logistics, materials and human resources are used, either in-house or outsourced. More can be undertaken and viable.”
Bullock questioned whether Australians might eventually have to pay to use cash, given the increasing costs of distribution and declining user base. The RBA is committed to keeping cash as a payment option, but the evolving payment landscape requires ongoing adaptation and innovation2.
Cash Welcome, an advocacy group, has criticized Bullock’s remarks, arguing that there is little evidence to support the claim that cash usage is declining significantly. Jason Bryce, the founder of Cash Welcome, stated, “If Michele Bullock thinks cash will disappear in Australia within ten years, the RBA needs to provide some evidence to back up those big words”.
Bryce also highlighted the gap in the RBA’s logic, noting that there is no viable alternative payment system to banknotes that is private, instant-settlement, reliable, and trusted. This underscores the ongoing importance of cash in the financial ecosystem.
Michele Bullock’s speech underscores the complexities of reshaping the cash infrastructure. The future sustainability of the cash infrastructure will require a more proactive approach from the Reserve BankSee Central bank. More and the cash community.