On Tuesday, thousands of people around Australia rushed to ATMs and withdrew bundles of cash, in protest of the inevitable transition to a cashless society.

Their concerns ranged from privacy issues and fears of a complete phasing out to conspiracy theories involving government surveillance and attempts to lock people in their homes.

Dr Angel Zhong, associate professor of finance at RMIT University, said it is likely that cash payments will likely be only one or two per cent of all payments within a few years.

“A functionally cashless society means that cashless payment becomes the dominant payment approach, but it doesn’t mean your cash loses value,” she said.

“We’ve seen a lot of businesses starting to refuse cash as payment and legally that is allowed.”

Australian businesses can legally refuse to accept cash if the consumer is informed before a ‘contract’ is entered for services or goods to be supplied.

Zhong said that businesses handle hidden costs and challenges when they receive cash payments.

“Research shows on average that the time for a small business in Australia to process, count, reconcile and deposit the cash is 29 days,” she said.

“Using cashless payment enhances efficiency and that’s why there is a declining preference.”

The use of cash payments halved between 2019 and 2022 from 32 per cent to 16 per cent, according to the Reserve Bank of Australia’s Consumer Payments Survey.

Banks like Macquarie, ANZ, NAB and Commonwealth have started to either phase out cash at some branches or announced plans to stop accepting it completely, while Bob Katter made news last month after the parliamentary cafeteria refused to accept his $50 note.

Bob Katter was fired up at a parliamentary cafe’s cash-free policy. Photo: AAP

Is concern warranted?

LNP member for Wide Bay Llew O’Brien encouraged people to withdraw cash and spend it in their community because “the big banks don’t get any kickbacks”, among a host of other reasons.

“Cash is not affected by internet blackouts, cyber attacks, hacking or scams,” he said.

“When you use cash for a purchase, neither you nor the business owner pays a surcharge.”

Tweet from @BrienLlew

Zhong said there are legitimate concerns about moving away from monetary notes and coins to completely electronic payments.

“For example, internet outages, infrastructure and privacy concerns, as well as cyber attacks,” she said.

“There are also vulnerable groups, such as the older generations, who are not tech savvy, as well as those in rural areas.”

She said there is a generational divide between people adopting electronic payment methods.

“Young Australians, aged between 18 and 29, are leading the pack,” she said.

“It’s important that we establish outreach programs to help people embrace innovation and technology.”

Coles limited cash withdrawals over Easter in case Armaguard, which transports large amounts of money between businesses and banks, went bankrupt, as some have feared the Lindsay Fox-owned company would.

Lessons from abroad

Other countries have experienced a backlash towards the inevitable march of a functionally cashless society, but have dealt with it in different ways.

Sweden introduced laws in 2019 that forced banks across the country to continue to offer cash services.

In Zimbabwe, third-party electronic payment platforms account for more than 95 per cent of all transactions because of the hyperinflation of its currency and a failed attempt at launching a new ‘surrogate currency’ in 2014.

According to Chris Vasantkumar, a lecturer in anthropology at Macquarie University, the result was a “disruption of pre-existing forms of economic life, rather than their seamless extension.”

“It is tainted by distrust in government institutions and the value of all money,” he said.

“Bad cash is better than good plastic!” as one street trader in Bulawayo (Zimbabwe’s second-largest city) told me.”