Aussies stashing cash, reject traditional banking amid Covid

News Corp AustraliaNCA NewsWire
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Camera IconNot Supplied Credit: istock

Everyday Australians are increasingly straying away from banks and keeping their earnings hidden under mattresses in their homes.

The Covid pandemic has heightened economic uncertainty and accelerated the demise of traditional banking methods.

New data from the Reserve Bank has shown people are turning to tap-and-go and direct debit avenues of payment over ATM withdrawals and cheques.

Anxiety around the economy crashing has also led to people withdrawing cash and stashing money under mattresses and shoe boxes across the country.

CommSec chief equities economist Craig James said there was also an emerging trend of people stashing money around their homes, as economic uncertainty emerged.

“There’s plenty of $50 or $100 notes stashed in mattresses or other parts of the house. When people are unsettled or worried about the economy, they hold those big notes,” he told Nine.

“People might have $10 or $20 as an emergency in their wallet, but that’s about it now.”

STOCK IMAGES - Banks
Camera IconNew data from the Reserve Bank has shown people are now commonly turning to tap-and-go and direct debit avenues of payment over ATM withdrawals and cheques. NCA NewsWire / Jeremy Piper Credit: News Corp Australia

Despite the use of personal cheques falling by 39 per cent pre-pandemic, Covid has accelerated the decline, with the RBA reporting just 719,000 personal cheques were drawn by Australians, equivalent to 0.3 per cent of all transactions for the year.

It is the smallest number since the organisation started collecting data.

In February last year, more than $10.2 billion in cash was withdrawn from ATMs nationwide but by August this year, that had fallen by almost $3 billion to a record low of $7.3 billion.

Australian Currency - Australian Notes
Camera IconThe pandemic has accelerated the decline of traditional banking methods, including cash payments. Credit: istock

The use of debit cards has also been on the rise.

ABA Chief Executive Anna Bligh said while debit card usage has been increasing over the last decade, it has been accelerated as a result of the pandemic.

“Debit cards continue to be the number one choice when Australians purchase something in person or online, and that means the majority of us are paying with our savings instead of credit,” Ms Bligh said.

“Australians love new technology. More and more of us are doing our banking online or through apps and we can expect the use of cash to continue its decline in 2021 and the future.”

Originally published as Aussies stashing cash, reject traditional banking amid Covid

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