Australia continues its move to an online banking world, with fewer bank branches and ATMs. Most of us are fine with that, as we do more of our financial transactions and shopping online. But a recent survey of the move to a cashless society in Europe shows that these changes can have their problems.
According to the latest APRA report on authorised deposit-taking institution points of presence, close to 10 per cent of the branches operated by banks and other ADIs have disappeared over the past two years. The loss of ATMs is even bigger, at more than 16 per cent over the same period.
The number of branches fell from 5816 in 2017 to 5609 last year and 5314 in the latest survey.
The number of ATMs in service has fallen from 13,815 in 2017 to 12,639 last year and 11,560 in the latest survey.
Curiously, the number of payment terminals rose from 801,502 in 2017 to 836,649 last year and then fell back to 803,188 in the latest survey.
Advocates of a cashless payments system and a branchless banking system need to learn some lessons from the Swedish experience, where cash is disappearing more quickly than in any other country. It can be hard to use cash there.
Lance Blockley, managing director of consultancy the Initiatives Group, said there were unresolved issues coming out of Sweden’s cashless experience.
Blockley said: “There are problems with cashless. ATMs are disappearing. This is not much of a problem in the cities, where cashless payments are well established but it is a problem in rural areas, where people still rely on cash. It is also a problem in migrant communities.
Speaking at a meeting of the Emerging Payments Association Asia, Blockley said: “The challenge is to not leave people behind.
“When we spoke to people in the [Swedish] payments industry, one comment we heard a lot was that they would have liked more central planning for the change,” he said.
“This has been done without central planning. It has been consumer led, enabled by technology.”
The catalyst for change was the 2012 launch of Swish, a mobile payment app enabling peer to peer payments. It allowed payments to be paid to anyone in real time. Since then it has moved into e-commerce and more recently point of sale.
A few years ago the Reserve Bank invited submission on phasing out cheques. It wanted to plan for their disappearance from the payment system.
Not much came of that work and not much has been done here to plan for the phasing out of cash. When the Government is finished with punishing the banks for the misconduct the Hayne Royal Commission exposed, these are among the issues it could turn its attention to.