Scout looks at how strong the cashless trend is becoming and whether or not the hospitality industry will remove coins and notes completely in the coming years.
Payment options across the hospitality industry are doing a flip. Cash-only dining in on its way out; the trend now is cashless.
Last month, Charlie Carrington’s Colours by Atlas launched as a card-only venue, joining a myriad of renowned venues and dining districts across the country – including Sydney’s Spice Alley, Brisbane’s Corbett & Claude restaurant, and popular Melbourne cafe Pope Joan.
Going cashless has allowed these venues to increase service-delivery speed, reduce theft and lower labour costs, amongst other benefits.
The trend has come on the back of a significant decline in cash payment in Australia over the last decade. According to the Reserve Bank of Australia (RBA) they dropped from 69 per cent of overall payments in 2007 to just 37 per cent in 2017. This has lead to Australia becoming the seventh most cashless society in the world.
But how far is the hospitality industry going with this? Is a totally cashless industry really on the horizon?
Consumers think so. A recent Westpac report found that the majority of smart-phone users believed Australia would become cashless by 2022. And a recent Oracle Survey found that only 33 per cent of consumers expect to be paying for food and drink with cash by the same date.
Industry is certainly pushing towards it. ATMs are on the decline in shopping-centre food courts; new digital payment upstarts are taking off and some of the world’s biggest restaurant groups – including McDonald’s, Shake Shack and Tossed - have invested significantly in cashless infrastructure.
The rise in automation is also speeding up the process.
The government is doing their bit too, albeit indirectly, as they try to curb corruption and increase tax collections. Last year they created the Black Economy Taskforce to crack down on individuals and businesses using cash to skirt tax obligations.
Cash transactions of over 10,000 have also been recently banned, and instant bank transfers between different institutions have been given the green light, reflecting a centralised push away from cash.
Despite all of this, the movement isn’t without roadblocks.
Firstly, not all venues are keen on the move, because not all customers currently have access to, or are keen to use, card or a digital device. As RBA assistant governor Lindsay Boulton recently explained: “Cash transactions still offer anonymity, instantaneousness and a tangible element that gives confidence.”
With low margins common and heavy competition across the industry, the risk of even the slightest backlash from these customers is too great for some to take.
Venues are also put off by bank transaction costs, the risk of losing tips and technical complications.
There are a number of other roadblocks, too.
In Sweden, where over 95 per cent of transactions are made on card, there’s been backlash from groups representing vulnerable communities, including the elderly, who say they have become significantly disadvantaged. Australia is likely to experience similar lobbying in the coming years, which may result in a regulatory intervention.
There’s the problem that phasing out cash may also put the country at risk should we encounter a serious crisis or war. This concern may not be a hospitality issue as such, but if the industry is to make the change, it needs to be one supported by the greater economy.
So while some commentators are predicting that we’ll be cashless in the next five years, we’re less certain. What we can be sure of though, is that the future will be “less cash”.
