Cash usage continues to fall

A new survey of payment methods by the Reserve Bank has shown that the number of customer cash and cheque payments has continued to fall. The use of cards has risen significantly, and there has also been an increase in the use of PayPal.The survey has shown an increase in the use of cards at the point of sale, which is likely to reflect both growth in the availability of card terminals at merchants as well as changing consumer preferences.The growth in online shopping has led to an increase in the share of purchases being made remotely (i.e. not at the physical point of sale), from 6 per cent in 2007 to 14 per cent in 2013. Internet payments (which include smartphone payments) grew as a share of all remote payments made in the survey from just over half in 2007 to around 90 per cent in 2013, with a corresponding fall in postal and telephone payments.While cash makes up almost 80 per cent of transactions under $10, as a share of all payments, cash fell from 69 per cent in 2007 to 47 per cent in 2013.The decline in cash use was significantly smaller for those aged 65 years and over.Cards were the most frequently used payment method for those aged under 40 years.The survey showed that the use of personal cheques for payments has continued to decline to the equivalent of three cheque payments per person per year in 2013, from eight in 2007.