Retirement Life
17 April 2024

Could you cope without cash?

Like many areas of life that technology has altered beyond recognition, the move away from physical cash started gradually before accelerating so swiftly it’s left more than a few heads spinning.


An endangered species?

In a ‘cashless society’ all, or most, financial transactions are conducted electronically, through cards, online banking, or mobile phone payment apps.


It’s a particularly hot topic across the Tasman, with many of Australia’s biggest banks announcing they’ll no longer be handling cash in branches. One expert – economics professor Richard Holden – predicts there’ll be no physical money at all in Australia by the end of the decade.


“I think we’ll be actually cashless by 2030,” he said in a recent interview.


The benefits of digital transactions

The rapid uptake of electronic transactions is driven by convenience, security, and efficiency, with businesses less vulnerable to robberies if they don’t have money on the premises, while also saving time not having to count cash or physically visit a bank to deposit it.


In fact, the benefits are so great that an increasing number of businesses no longer accept cash. And more and more people are leaving their wallets at home on purpose, simply relying on payment apps on their phone to pay for things.


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Older people are comfortable with cash

You’ve probably adjusted to the demise of the chequebook and the rise of tap-and-go bank cards, as well as the shift to online banking and direct debits that let you pay your bills without lifting a finger - but would you be comfortable losing access to cash entirely?


Older people can be particularly reluctant to conduct all of their financial affairs online. For those who relied on physical currency for most of their lives, the tangible nature of cash can provide a sense of security and familiarity unmatched by numbers on a screen. This can lead to feelings of uncertainty and vulnerability, which are only amplified for those individuals who are intimidated by the world of computers, smartphones, and apps.


Further, for many seniors, a trip to the bank or local store isn’t just about ticking another chore off their list, but also an opportunity for social interaction. The shift to online banking and cashless transactions might inadvertently increase their isolation.


Cash won’t disappear in NZ

The good news is that cash is unlikely to disappear completely in New Zealand. The Reserve Bank (RBNZ) publishes quarterly data on cash use and its latest release indicates 48% of us still use cash to pay for everyday things.


Ian Woolford, RBNZ’s director of money and cash said in a recent interview that he believes maintaining the cash system is both a current and future need.


“I don’t buy into a binary narrative involving the death of cash and the rise of digital alternatives because these are not pure substitutes for each other, and we know from our research that the public values the option of cash,” he said.


Tips for going digital

All that aside, going digital does have its perks – losing those notes and coins can make transactions quicker and easier, not to mention lighter and cleaner, too!

It’s totally normal to feel anxious at the thought of using your bankcard to buy something online, or whipping out your phone to pay for your groceries if you’re not used to it. With that in mind, here are four tips to help you navigate the world of digital transactions:


  • Don’t be afraid to ask for help: Take advantage of local community programmes that offer training on digital banking and cashless transactions, or ask your local bank staff to talk you through their online services. Family and friends are a good source of advice and guidance, particularly if you have a digital native in your life (those born in the 1990s or later who have spent all or most of their life online)!


  • Use trusted apps: Stick to well-known payment apps and services that have strong security measures in place, such as those offered by your bank. If you have a smartphone, apps like Apple Pay, Samsung Pay, or Google Pay are very widely used and let you store your bankcard details on a ‘wallet’ in your phone, which you can then use in place of your actual bankcard.


  • Keep safe online: Use strong, unique passwords and never share personal information with unverified sources. Consider having a transaction account with a relatively low balance, separate from your savings and the money you set aside to pay bills.


  • Keep records: Maintaining a notebook or digital log of all your transactions can give you a greater sense of comfort and control over your digital payments.


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Transitioning to an increasingly cashless society is a significant change, but it’s one that comes with many benefits. With the right tools and a bit of practice, even the less tech savvy among us can enjoy the convenience and security of digital transactions. Remember, it’s okay to take it one step at a time and seek support when you need it.


Photo of Vanessa Glennie
Written by:

Vanessa Glennie

Vanessa is Head of Communications at Lifetime Retirement Income. She’s an experienced investment writer, having spent more than a decade writing about financial markets in the global fund management industry.

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