Australia is turning its back on cash – almost 90 per cent of consumer payments are now made online and through cards.
A new report from MasterCard has ranked Australia’s cashless rate sixth in the world, and first in the Asia Pacific region.
Eddie Grobler, MasterCard’s Australasia division president, said the report shows that Australians are early adopters of technology.
“Consumers are becoming more and more comfortable making transactions using their cards in-store and online. The challenge now is educating Australians that small purchases like heading down the road to grab a coffee and paper can be made with greater convenience by leaving the cash at home,” Grobler said.
Of course, this idea raises questions about the minimum EFTPOS spend many small businesses – particularly cafés – have in place.
The fees businesses pay are determined by the banks through which they operate their EFTPOS terminals, and most banks are still charging fees for transactions below $10.
However, there may be an end in sight for the surcharge – Grobler said solving the issue is definitely part of MasterCard’s strategy.
“We have started to look at a special arrangement for low value payments, where we give a special dispensation to our acquiring banks to facilitate or accommodate low-value payments and make it more attractive for merchants as well,” he said.
While cash accounts for less than 15 per cent of the total value of transactions, it still equates to almost 70 per cent of the total number of transactions, with low value payments making up a significant bulk of this number.
The rise of contactless technology like PayPass has helped to push the minimum spend issue back onto the agenda. Recent figures from MasterCard show that 7 out of 10 transactions under $50 are now contactless.
“We now have over 170,000 Paypass enabled terminals in the market. We also have a payments roadmap, where we work with the banks and the merchants to have all the new terminals installed be Paypass-enabled,” Grobler said.
He believes this means there’s an end to the minimum spend charge in sight.
“We’ve seen that merchants are starting to accept lower ticket values as well through payments with contactless. Contactless is the real game changer,” Grobler said.