Recent research by banking market analysts East & Partners showed Australian merchants’ cash receivables plummeted by 46 per cent between 2010 and 2016.
If the trend continues at the same rate, cash payments across all Australian businesses will dip below five per cent by 2019 and then hit two per cent within the next five years.
Over the same period, credit card payments dropped by 11 per cent, and debit card receivables surged by 56 per cent.
“Backed by recent figures from the Reserve Bank showing ATM withdrawals falling to all-time lows, East’s research indicates that cash is increasingly vanishing as a preferred payment method,” Martin Smith, head of markets analysis at East & Partners, said.
“Additionally, the Reserve Bank’s surcharging limits coming into effect later this year will spur consumers to use payment options linked to their debit and credit cards more for everyday purchases.”
East extended the scope of the Merchant Payments Report to include Australian businesses’ feedback on non-bank point-of-sale terminal penetration, cloud accounting integration, and the upcoming New Payments Platform. Currently, 82 per cent of merchants say that they either “accept” or “plan to accept” online payments, compared to just 15 per cent in 2010.
In contrast, far fewer businesses have migrated to “mobile friendly” websites and payment platforms. According to the research, only one in five of all Australian merchants believe their website has a “mobile friendly” browsing functionality, anchored by the micro segment, of which only 15 per cent have reported an optimised mobile payment offering.
In the increasingly competitive point-of-sale market, providers such as PayPal and Tyro enjoy the highest market penetration among non-bank providers. New entrant Square Payments is quickly gaining traction with 8.4 percent of all businesses reporting either using, or having considered using the mobile friendly credit card reader.
While online transaction reporting and management is a future technology priority for one third of all businesses, 43 per cent said they have integrated a cloud accounting platform such as Xero or MYOB into their payment systems.
This article first appeared in Banking Day.