RBA study finds cards are king, overtaking cash for the first time

Credit and debit cards have overtaken cash as the most frequently used consumer payment for the first time, as food retailers and ridesharing apps such as Uber offer more cashless payment options.

Cards were the most frequently used means of payment, accounting 52 per cent of consumer payments, followed by cash at 37 per cent, according to the Reserve Bank’s consumer payments survey released on Tuesday, which surveyed 17,000 day-to-day payments made by over 1500 participants during a week.

A decade ago, cash accounted for nearly 70 per cent of consumer transactions, and cards 26 per cent.

The RBA said credit and debit card use increased across the board in the past three years, but particularly at food retailers and for public transport and taxis.

It said smaller food retailers experienced a rise in the use of contactless cards. The Australian Financial Review reported in February that more shops and restaurants, such as Asian food vendors in Sydney’s Spice Alley, are going cash free.

The RBA found the rollout of electronic public transport ticketing, such as Sydney’s Opal card and Adelaide’s metro card, may have contributed to an increase in the number of card payments.

Mobile booking apps for ride-sharing and traditional taxi services may have further contributed to the rise of card payments, RBA said.

In contrast, there was a smaller increase in card payments at supermarkets and petrol stations in the past three years, because they had already implemented contactless card terminals by late 2013.

The RBA said people used cards more for lower-value transactions and as a result, the median value of card payments at the point of sale declined from $40 in 2007 to $28 in 2016.

Consumers of all ages are using contactless cards more frequently than they did three years ago, with nearly 60 per cent of participants in 2016 making at least one contactless card payment during the week of the survey, compared with about one-third of participants in 2013.

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Source: RBA study finds cards are king, overtaking cash for the first time | afr.com