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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael

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Speaker 1: Thompson and hello Sean.

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Speaker 2: Aylmer, Hello Michael, Sean.

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Speaker 1: Today's question. I love this one. It has having from

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Speaker 1: Lisa on Instagram, and you can go to Instagram or

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Speaker 1: Facebook or LinkedIn or our website Fearangreed dot com dot

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Speaker 1: are you and send your own question through Lisa's done

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Speaker 1: this via Instagram. She says, Hi, Sean and Michael. Just

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Speaker 1: one day I would like someone to say, Hi Michael

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Speaker 1: and Sean. It's probably not the occasion for that. You

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Speaker 1: mentioned on the podcast that the Reserve Bank governor has

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Speaker 1: committed to keeping cash in the economy even though fewer

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Speaker 1: people are using it and it's getting uneconomical to move

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Speaker 1: it around. Why are we so wedded to cash? Who

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Speaker 1: is actually still using it? Why don't we just bite

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Speaker 1: the bullet and go cashless? Surely will end up there

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Speaker 1: one day anyway, So why not?

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Speaker 2: Now?

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Speaker 1: A great question?

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Speaker 2: So it is actually interesting because the answer is not

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Speaker 2: quite as obvious as you might think. So the general

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Speaker 2: view is the people who use cash tend to be

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Speaker 2: older people and often people like lower socioeconomic groups use

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Speaker 2: cash more. That's what the theory is. However, a couple

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Speaker 2: of years ago, the Reserve Bank released a report on

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Speaker 2: consumer payments. What was interesting was that the use of

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Speaker 2: cash has gone from about thirty two percent of transactions

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Speaker 2: to sixteen percent. I dare say this is two years ago,

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Speaker 2: so I dare say it's even lower than that. The

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Speaker 2: big change was COVID nineteen. People didn't want to use

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Speaker 2: cash and as a result they kind of used cards,

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Speaker 2: and that really pushed people. What was even more interesting

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Speaker 2: in that was that it isn't anymore the older people

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Speaker 2: or the lower socioeconomic people that use cash. In fact,

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Speaker 2: well there's not much difference across demographics. Geography is not

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Speaker 2: used to say country rule areas would use cash more,

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Speaker 2: but connectivity is sound much better in most of those places.

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Speaker 2: Now that's not the case, and so that small I

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Speaker 2: mean the sixteen percent, let's say it's probably twelve or thirteen,

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Speaker 2: could even be ten percent. Now it's actually across all

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Speaker 2: demographiy locations. That type of thing, which don't think's fascinating.

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Speaker 1: That is fascinating. But you're also saying then that if

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Speaker 1: we were just to transition more quickly. We're not going

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Speaker 1: to be discriminating against any particular demographic more than anybody else.

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Speaker 1: So why don't we just do it well?

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Speaker 2: Because some people still want to use cash.

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Speaker 1: So that do you, sean, do you in your pocket

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Speaker 1: right now, have any physical cash?

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Speaker 2: You're the funny thing, Well, you're.

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Speaker 1: Actually going to prove me wrong. Now you're going to

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Speaker 1: bust out it that balance that is a crisp five

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Speaker 1: dollar note.

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Speaker 2: The reason is that at some point in the last week,

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Speaker 2: Jackie gave me twenty dollars because we're going for a walk,

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Speaker 2: and her mother, who is eighty six, had given her

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Speaker 2: the twenty dollars, like she gives her cash to go

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Speaker 2: and get a groceries and so sometimes. And I had

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Speaker 2: the twenty dollars in my pocket for about a week

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Speaker 2: and only this morning we went for a walk and

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Speaker 2: I said, I've got the twenty dollars. I'd pay for

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Speaker 2: it that way. But but that's a triple butt there.

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Speaker 1: Never do I have cash, No, no, And I'm even

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Speaker 1: finding it hard. I try to teach how kids about

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Speaker 1: money right, and it's so much easier with pocket money

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Speaker 1: if you can give them coins and give them cash

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Speaker 1: and help them build it up, and so took them

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Speaker 1: to the museum to see this exhibition, and they had

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Speaker 1: saved their money and they were allowed to buy something

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Speaker 1: in the gift shop, and they had all of their

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Speaker 1: coins and everything all saved up ready to go. They

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Speaker 1: went in, went up to the counter with their coins,

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Speaker 1: put their money on the counter. They said, sorry, we're cashless.

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Speaker 1: Only how am I supposed to teach a parenting lesson here?

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Speaker 2: So that's an interesting point because the government is actually

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Speaker 2: going to ensure that some services except cash. Now I'm

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Speaker 2: not sure about the museum. I don't know that's going

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Speaker 2: to fall into it, but.

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Speaker 1: It's probably a non essential kind.

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Speaker 2: Of but i'd imagine supermarkets for example. We'll definitely have

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Speaker 2: to cause cash. And the fact of the matter is

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Speaker 2: that some people prefer cash. Sometimes you don't have access

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Speaker 2: to So I've been to country towns where I couldn't

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Speaker 2: use my card and I've actually said I haven't got

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Speaker 2: no cash. I've gone back emailed them the money because

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Speaker 2: it's too hard to actually get connectivity. So people still

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Speaker 2: want to use it, and the governor said we will

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Speaker 2: ensure that's the case. Michelle Bullock last week at the

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Speaker 2: Reserve Bank said, yet we will ensure that cash remains

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Speaker 2: in the system. The big challenge there is that shifting

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Speaker 2: cash around the place is now no longer economic because

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Speaker 2: there's not enough of it to be shifted around. So

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Speaker 2: that's kind of why the government has put money towards

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Speaker 2: allowing that to happen, but people still want to use it.

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Speaker 1: A couple of quick points. You see the value of

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Speaker 1: cash when there is an outage with a bank or

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Speaker 1: a blackout or something at a shop and all of

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Speaker 1: a sudden you can't tap or you can't transfer your money,

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Speaker 1: and you are suddenly reliant on your scrounging through the

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Speaker 1: car kind of looking for coins and things to actually

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Speaker 1: pay for things. And so you're like, okay, all right,

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Speaker 1: it's nice to be able to fall back on that.

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Speaker 1: If it's The other question though, is the cash economy

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Speaker 1: and the impact on tax Right, there would be a

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Speaker 1: fairly significant incentive for the government to try and kind

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Speaker 1: of get rid of the cash economy to a degree, right,

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Speaker 1: because there is a fair bit of money that changes

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Speaker 1: hands without ever going by the ATO.

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Speaker 2: Yeah, I mean it's kind of like money laundering. That's

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Speaker 2: all you're inferring money laundering, and I mean, that's not

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Speaker 2: what you mean, because most people aren't faundering money. I

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Speaker 2: don't quite understand though, why we should get rid of cash.

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Speaker 2: Like I I just my mum, who's ninety three, in

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Speaker 2: fact ninety three on fridayy birthday man birthday. She always

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Speaker 2: has cash in her wallet and she doesn't sort of

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Speaker 2: as she's gotten older and where she lives and that

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Speaker 2: the value of cash is not overly relevant to her

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Speaker 2: in a sense, but it's like a security thing for

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Speaker 2: her just to have it, and she never spends it

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Speaker 2: because she's got I mean, she doesn't go out much

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Speaker 2: and whatnot.

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Speaker 1: Well, I've seen those stats as well on just how

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Speaker 1: many notes there are in circulation and how many notes

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Speaker 1: are believed to be kind of tucked away somewhere under mattresses,

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Speaker 1: in roofs, all that kind of thing, which is just

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Speaker 1: staggering to think. Do you think we will ever get there?

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Speaker 1: Do you think we will ever actually be really nearly

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Speaker 1: one hundred percent cashless?

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Speaker 2: No? No, I don't like by far. About I think

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Speaker 2: it's about seventy percent of cash comes from ATMs people,

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Speaker 2: it's how they get their cash, and then there's about

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Speaker 2: fifteen percent or so that actually go to the bank

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Speaker 2: to get it, and about the same amount actually get

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Speaker 2: it from family members, so like as a gift, they

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Speaker 2: get that. But yeah, I don't think that it will

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Speaker 2: be stamped out somehow.

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Speaker 1: Okay, all right, maybe I'm just bitter because of my

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Speaker 1: museum experience.

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Speaker 2: So I'm just.

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Speaker 1: Holding onto this thing. Fine, maybe you won't let me

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Speaker 1: use cash. I'll never use cash again. That'll teach you. Look,

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Speaker 1: I think we've answered Lisa's question.

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Speaker 2: Yes, it's kind of one of those questions I sometimes

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Speaker 2: struggle to get. Why do we want to get rid

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Speaker 2: of cash? I don't think we should get rid of cash?

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Speaker 1: Okay, all right, I'm mom's sake, No, and that makes

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Speaker 1: sense that maybe. But though as that number, that sixteen

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Speaker 1: percent becomes twelve percent, becomes ten percent, becomes eight percent,

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Speaker 1: that almost become de facto cashless anyway.

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Speaker 2: Yeah, yeah, I mean I do have five dollars in

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Speaker 2: my pocket, but I never use cash.

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Speaker 1: All right. Thank you Lisa for the question. Thank you

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Speaker 1: Sean for not to know whether it's answering or discussing

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Speaker 1: it at least.

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Speaker 2: Michael, Thanks Lisa.

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Speaker 1: Remember, if you've got something that you'd like to know,

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Speaker 1: then please send through your question on LinkedIn or Instagram

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Speaker 1: or Facebook, or head to fearangreed dot com, dot you

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Speaker 1: and send it through the website. I'm Michael Thompson and

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Speaker 1: this is ask Fear and Greed