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The Cashless Revolution

New payment technology provides benefits that last well beyond the initial purchase

Sydney business owner Stuart Ghent is reminded how contactless payment systems have changed his life every time he opens his wallet. “I’ve always taken $300 out of the bank,” he says. “It used to last me a week – now it lasts a month.”

The founder of creative advertising business Written knows he isn’t spending any less money – he’s just one of the estimated four in five Australians who have been swept up in the contactless money revolution. He still has cash in his pocket, but he now spends most of his money through tap and pay transactions, or via smartphone software and apps, such as Uber or Deliveroo, that allow him to pay directly with his credit card.

“I’d say 75 per cent of my expenditure would be on a card,” Ghent says. “And as there’s more acceptance of using plastic and mobile devices for small expenses, when I can use it to buy something for $3 then I’m likely to use it even more.” He says it’s become natural and effortless to pay for everything from groceries to bills to takeaways to coffees, and that it would now be unthinkable to go back to pulling out cash for everyday items.

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But it’s not just the transactional benefits that flow from using credit and debit cards and other technology equipped with contactless technology. It’s changed our relationship with money. We carry less cash around, and don’t need to visit the ATM as often. Consumers can buy just about anything with just a swift tap of the card – no PIN or signature required – and earn associated rewards points. This means they can get what they want with very little effort.

AusPayNet’s “The Digital Economy” from May 2017 shows how quickly Australia is becoming a cashless society, with ATM usage falling 22 per cent in the past five years. The use of cheques fell by another 20 per cent in 2016 alone, reflecting our preference for faster digital payments. The report found that Australia already has the highest percentage of point-of-sale terminals in the world and that Australians completed $72 billion worth of card transactions in 2016, which is a 72 per cent increase since 2011.

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We’re increasingly using cards rather than cash for in-person purchases as well as online payments, too. The Reserve Bank's 2016 Consumer Payments Survey found the median value of point-of-sale card payments declined from $40 in 2007 to $28 in 2016, indicating how often consumers now use their cards for everyday purchases.

Personal credit and debit cards have become the gifts that keep on giving for consumers. The boom in using cards to buy everyday items has reinvigorated the rewards programs offered by retailers, banks and airlines, and even encouraged non-financial institutions to enter the category. Qantas, for instance, recently launched the Qantas Premier Mastercard. Every transaction mounts up, and consumers can earn worthwhile benefits paying for everything via their cards that are teamed with modern, easy-to-use rewards schemes.

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There’s little doubt contactless technology and other applications that link personal devices to retailers will continue to transform how we make everyday purchases and accumulate points in rewards programs.

While the latest payment systems have brought greater convenience, they haven’t increased users’ security concerns. The 2016 Mastercard survey found that 64 per cent of Australians were “not very” concerned about security when using contactless cards, up from 46 per cent two years earlier.

“Near-field communication” chips, such as those used in payWave and contactless transactions, have secure encryption technology that protects them from being “scanned” in a purse or wallet. Tap and pay card users also never need to give their credit cards to a merchant or waiter to be “checked” in a backroom, which might leave them open to scammers. Apps that collect credit card data generally use bank-grade security systems and data encryption.

The Australian Securities and Investments Commission Australians’ spending habits in 2012 and found that the average household spent $69,166 on general living expenses. Allowing for inflation, this would now be equal to about $75,000. If, for example, all purchases were made on a Qantas Premier credit card, which is associated with the Qantas Frequent Flyer program, a Melbourne family of four would earn enough points in one year to fly to Perth (one way, plus $36.51 each in taxes, fees and carrier charges).

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Ghent says he’s putting more things on his credit cards these days because he’s aware that they’re earning him rewards points. “There’s an additional incentive to put a credit card down,” he says. “I use these points once a year – perhaps to bring my Mum up from Melbourne.”

He said that his wife, MaryAnn, has spent enough over the years on her credit card linked to Qantas Points to take him and their two adult children on a family skiing holiday. “She’s taking us to Japan this year,” he says.

Qantas Premier credit card

Cashless payments are now the norm for many consumers, and organisations that offer more rewards are getting in on the credit card game. The launch of the Qantas Premier credit card makes it even easier to earn Qantas Points. From your morning coffee to the grocery shop, small amounts can help you reach big rewards more quickly.
Until 31 October 2017, earn 60,000 bonus Qantas Points by applying for the Qantas Premier credit card and spending $3,000 within 90 days of approval. Suddenly life stops "just happening”, and instead, becomes all about planning the next adventure.

Qantas Points and taxes, fees and carrier charges quoted for Classic Flight Rewards are accurate as at 16 August 2017 and are subject to change. Classic Flight Reward seats are subject to capacity controls and availability is limited. For more information, visit the .