Australian Cashless Economy

Australian banks and entrepreneurs or involved in the race to grab a share of the $170 billion that Australians spend each year on transactions worth $35 or less.  Cash has traditionally been the main payment method for these small transactions there will soon be a host of cashless options.

He we look at a few of the new technologies for cashless payments.

Mobile payments: with almost every Australian adult owning a mobile phone, mobiles offer a convenient option for cashless payments. While premium SMS has been used for some time to childish items such as ring tones, in the not too distant future you will be able to use your phone to buy items from vending machines or food from fast food restaurants and so on. This is technology already used in many places in the world but not that widespread yet in Australia.  Payments would get added to your monthly bill or deducted from your pay as you go balance.

Touchless: - credit card payments: Commonwealth Bank credit cards last year introduced the Mastercard pay pass sytem to it's credit cards. This involves a small micro-chip embedded into your everyday credit card. You can still make credit card transactions as normal but for purchases under $35 at outlets with pay pass capability you can simply wave your card over a reader and the payment is instantly taken from your credit card without no PIN required.

Public transport smart cards: Australian cities such as Brisbane with the go card, Melbourne with the upcomeing myki card and Perth are seeing public transport smart cards introduced as new ticketing options. While these are currently only used for ticketing purposes, it is likely they will follow the example of overseas systems such as the Octopus card in Hong Kong which is accepted to pay of items at many retail stores including 7-Eleven, fast food such as McDonalds, taxis and vending machine purchases.

All these options will make small item purchases faster and more convenient without the need for change.  Expect to see these technologies rolling out over the next couple of years but it will probably take sometime to become widespread. In addition, credit card companies will need to convince consumers that these payment methods are secure and do not put the consumer at high risk of fraud.