Need to know
- There were 575 bank branch closures between 2017 and 2021, and more than a third of ATMs in rural areas were shut down
- In March this year, Bankwest announced it was closing all 60 of its branches in WA and shutting down its ATMs
- The phasing out of cash and banking services is having negative impacts on people who either can't or don't want to go fully digital
While going completely cashless has its benefits, there are often good reasons to resist the pressure to wholly surrender to the digital world.
Take scammers, for example. Many have set up shop in the dark corners of cyberspace, and Australians continue to lose billions as a result.
And it's no coincidence that the demographics being forced to go digital against their will – older Australians and First Nations communities in particular – are also the most vulnerable to scams.
Cash remains vital for many people in these groups. Taking it away can cause serious disruptions.
The demise of cash in Australia
Cash transactions around Australia dropped from 32% to 16% between 2018 and 2022, not least because more and more businesses refused to take cash. The COVID pandemic had something to do with this, but, in any event, the law says businesses can choose which forms of payment to accept.
Yet a large number of Australians still depend on the certainty of a bank note, and they like interacting with people at their local bank branch as well.
The demise of traditional forms of payment and banking may be inevitable, but the rollout ... shouldn't trample over the needs of these vulnerable groups
Why should financial service providers have the power to strip this away? Governments in other countries are stepping in.
Earlier this year, for instance, access to cash legislation was passed in Ireland with the aim of preventing financial exclusion and protecting against cyber attacks and online system outages.
Meanwhile, an online petition in Australia calling for continued access to cash and branch-based banking services has over 170,000 signatures and counting.
Advocates for the rights of older Australians and Indigenous communities say the demise of traditional forms of payment and banking may be inevitable, but the rollout by financial service providers shouldn't trample over the needs of these vulnerable groups.
Branch closures: 'We recognise this may be difficult'
Despite the resistance, bank branches are coming down fast.
In 2022, CHOICE reported that 575 bank branches had closed between 2017 and 2021, and more than a third of ATMs in rural areas were shut down.
We surveyed over 6000 bank customers at the time, and many told us they had to drive long distances – sometimes over 100km – to do their banking. Older people and those with disabilities were the hardest hit.
In early March this year, Bankwest (owned by Commonwealth Bank) announced that it was closing all 60 of its branches in WA and shutting down its ATMs, telling customers, "We recognise this may be difficult news if you or your loved ones bank in branch, or if you feel reassured knowing a branch is nearby."
In early March this year, Bankwest (owned by Commonwealth Bank) announced that it was closing all 60 of its branches in WA and shutting down its ATMs
It is expected the move is going to have a negative impact on some people, especially in First Nations communities. Shutting off access to cash can also make everything more expensive.
The median surcharge for credit or debit card purchases is about 50 cents according to the most recent Reserve Bank of Australia (RBA) data. And surcharges have gotten harder to avoid.
In recent years, they've been applied equally to both credit and debit card transactions, whereas previously they were applied more often to credit cards.
In a recent RBA survey, 45% of respondents said they'd avoid a surcharge if they could.
The law says businesses can choose whether or not to accept cash, but paying with a credit or debit card often means paying a surcharge.
Push to digital: 'Attacking freedom of choice'
Community activist Sal Cavallaro has strong feelings on the issue. He's made it his mission to try to stop businesses from forcing people to transact digitally.
To that end, Cavallaro helped organise community resistance last year that he believes prevented a trial cashless Australia Post outlet in the Sydney suburb of Manly from becoming permanent.
To take away the freedom of how people choose to pay is unethical in my opinion
Sal Cavallaro
"There is a significant percentage of Australians that really don't want this to go forward unchecked," Cavallaro says. "They're really attacking our freedom of choice. Now it's looking like they've got their sights set on getting rid of phone banking, which is another very convenient, safe and efficient way to pay our bills."
Getting scammed is an ever-present worry for people in Cavallaro's age group.
"You read about it, you hear about it, you listen to it on the news. Not even the experts can differentiate between a genuine communication and a phishing scam or whatever it might be," says Cavallaro.
Reduced access to phone banking
Cheryl Firth, 70, is also up in arms about being dragged into the digital world. She's especially aggrieved at recent changes to St.George Bank's phone banking system.
As of mid-March, St.George Bank customers have had to make payments to other bank accounts or third parties either online or at a branch, something they could do previously with phone banking. The bank says the change is about "making transferring money safer and more secure for our customers".
For Firth, dealing with a bot on the phone that she contacted feels safer than doing transactions on what may or may not be the bank's website.
It's not that I can't do internet banking, but I don't trust the banks and feel safer doing phone banking
St.George Bank customer Cheryl Firth
She has had a brush with scammers her in the past, when she says an account was set up in her name at a different bank.
"It's not that I can't do internet banking, but I don't trust the banks and feel safer doing phone banking," Firth says.
She's comfortable with using a credit card, but many people she knows prefer to pay the old-fashioned way.
"I just feel that while we've got the generation above me and my generation alive, they shouldn't be allowed to suddenly just pull the carpet out from under us. I'm just really frustrated because I'm talking for a lot of people who can't talk for themselves. I'm sick of older people being treated like they can just be discarded and ignored."
Going cashless is not always a viable option for many Australians.
'Too many older Australians left behind'
Prominent seniors' advocacy groups are also expressing concern about the accelerating disappearance of cash and face-to-face banking services.
National Seniors CEO Chris Grice tells CHOICE it's "increasingly problematic" for older people when businesses stop accepting bank notes, especially for those who aren't digitally literate or can't afford an internet connection or a quality digital device.
"As a society we should be keeping cash available as this will help to mitigate the negative effects of cyber-attacks on banking and telecommunications infrastructure," says Grice.
Too many older Australians are being left behind in the rush towards online banking and a cashless society
Council on the Ageing CEO Patricia Sparrow
At the same time, he says, over-the-counter banking is necessary for vulnerable customers.
"[It] may be the only way to deal with certain banking issues," says Grice.
Council on the Ageing (COTA) CEO Patricia Sparrow says "too many older Australians are being left behind in the rush towards online banking and a cashless society."
She says that widespread bank branch closures "are making it increasingly difficult for older Australians to undertake their day-to-day banking needs", and that the fear of falling victim to a scam "is a constant source of stress and anxiety and is often why people prefer to conduct their banking in person, using cash".
Making the gap even wider
Lynda Edwards, a Wangkumara woman who works in financial capability at Financial Counselling Australia, tells CHOICE that digital banking is not always a viable option for First Nations communities, where internet access can range from spotty to non-existent.
People in regional and remote communities already have to travel long distances to get to a bank branch, Edwards says. Further bank branch closures are just going to make that problem worse.
Not being able to have access to banking services is just going to make the gap even wider for our mob
Lynda Edwards, Financial Counselling Australia
"I just don't think the financial services executives in the big cities understand the geographical challenges for First Nations people across this country. Not being able to have access to banking services is just going to make the gap even wider for our mob."
Edwards says the Bankwest closures reveal a rank failure to take the interests of First Nations and other affected people into account.
"As I understand it, a lot of First Nations communities over there do bank with Bankwest. Closing their branches and their ATMs is going to be instrumental in widening the gap. It's going to have a massive impact. They really should have thought about what they were doing and the impact it would have on these communities."
Harmful repercussions
Some First Nations people in WA may now be looking at a three-hour drive to do their banking. Not having access to cash will have harmful repercussions, Edwards says.
"A lot of First Nations people use cash as a type of budgeting process and they have limited access to digital devices. There won't be any understanding of what money is in the bank if they can't access their bank account."
Edwards says the lack of digital access is reflected in the fact that many Centrelink offices in remote communities have telephone rather than online services.
A lot of First Nations people use cash as a type of budgeting process and they have limited access to digital devices
Lynda Edwards, Financial Counselling Australia
And when online services are available to First Nations people in remote areas, scams are often not far behind – particular scams that specifically target Indigenous people.
But the larger issue for First Nations people is day to day life, Edwards says.
"How do you feed your family if you haven't got access to money? How do you keep up with your bills and pay your rent to be able to keep your housing? All of these things come into play. There are a lot of ongoing impacts."
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