Could cash make a comeback after CrowdStrike outage exposes risks?
Dec 27 2024
ABC News
In short:
Global systems outages, such as the CrowdStrike failure, can leave organisations without access to digital payment methods.
The federal government is consulting on plans to mandate that businesses selling essential items must accept cash.
What's next?
The government says the mandate will come in from January 1, 2026, depending on the outcome of the consultation.
When a CrowdStrike update caused millions of Microsoft systems to crash around the world in July 2024, many started questioning our heavy reliance on digital banking.
Daily life was disrupted — businesses and governments that couldn't accept cash as an alternative payment, had to shut down entirely.
Airlines, airports, banks, hospitals and retailers came to a standstill worldwide.
The system outages, as many pro-cash campaigners argued, underline the risk of moving to a cashless world.
Assistant Treasurer Stephen Jones agrees that cash provides an essential fallback when digital payments break down.
"Sometimes systems go down, sometimes electronic payment systems don't work," he says.
"We've all been standing at a queue in a supermarket or a shop somewhere, and they say the EFTPOS or the payments system has gone down, the power's out. We want to ensure that that doesn't become a crippling event right across the economy."
Minister sits at desk in his electorate office
Stephen Jones says cash is an essential fallback when digital payments break down.
The assistant treasurer says that's a big part of why, in November, the federal government mandated cash for essential purchases, such as groceries and fuel.
"We wanted to ensure all Australians — one-and-a-half-million Australians who prefer to use cash — are able to do that," Mr Jones tells ABC News.
Treasury has already started consulting on which businesses supplying essential goods and services should be covered by the mandate.
Mr Jones says Treasury is considering carving out small businesses with an annual turnover of less than $10 million.
Final details of the mandate will be announced later in 2025, and it is expected to take effect on January 1, 2026.
Cash transactions have declined as more people go digital
Cash use in Australia has been declining but isn't out of vogue just yet.
According to the Reserve Bank of Australia (RBA), in 2007, 69 per cent of Australians said they would use cash to transact.
Does cash have a future?
Regulators ponder how soon Australia may go cashless or whether Australians may have to bear the costs of using cash.
By 2014, his had fallen to 47 per cent. By 2019 it dropped to 27 per cent and by 2022, only 13 per cent.
Yousuf Qureshi has been selling carpets for 23 years and has seen this big shift in consumer preferences, but says for older people coming to his store to buy an exotic rug, cash is still king.
"They're saving their money, and when they're saving enough, they come by the [store]," he says.
"Sometimes they buy [carpets as gifts for] their grandson or granddaughter … they want to pay cash for them."
Mr Qureshi says in the early days of running his business, the split between those using cash versus debit or credit cards was roughly 50/50.
An older man in his rug shop with carpets behind him
Yousuf Qureshi says for older people, cash is still king.
Today, 90 per cent of customers use debit or credit cards to make purchases at his store in Preston in Melbourne's north-east.
"Globally, everything changed, it's a digital world now — maybe very soon, cash will be no more," he says.
Older users, migrants and people in regions still like paying with cash
RBA data shows older survey participants were the highest cash users, with 18 per cent of respondents aged 65 and above classified as high cash users.
By contrast, only 3 per cent of those under the age of 50 were high cash users. About 82 per cent were low cash users.
Kim Nguyen sees this trend at play.
She works at a butcher in Preston Markets in Melbourne and says 30 to 40 per cent of their customers — typically older people and migrants — still prefer to pay with cash.
A young lady at a butcher with staff working behind her
Kim Nguyen says the older generation can struggle with card payments and prefer cash.
"The older generation, sometimes they struggle with the card. They say, 'How does it work?' But the younger generation tap and go," she says.
Mr Jones says there's also a strong preference for cash in regional Australia, "where telecommunications networks aren't as good as they are within the cities".
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