Australia will be almost completely cashless within three years, with the COVID-19 pandemic speeding up the decline of coins and notes, new research says.
Just 2.1 per cent of point-of-sale transactions in Australia will be cash in 2024, down from 8.3 per cent in 2020, predicts fintech company FIS in its sixth annual Global Payments Report.
Globally, cash made up 20.5 per cent of transactions in 2020.
FIS says Australia will be the fourth most cash averse economy in the world after Sweden, Denmark and Hong Kong.
The decline was hastened by the COVID-19 pandemic, with cash transactions falling 4.4 per cent globally between 2019 and 2020.
"COVID-19 is accelerating the pace of cash's decline faster than even the most bullish projections," the report states.
"The pandemic accelerated the decline of cash by over three years, exceeding in 2020 our previous projection for 2023."
The Australian Tax Office may celebrate the prediction, after it revealed on Monday that businesses doing cash deals are costing the community up to $50 billion in unpaid taxes.
Reserve Bank governor Philip Lowe said in December that he doubted Australia would become a cashless society.
Electronic systems are not infallible and cash has an important role to play as an emergency payment method, he told a conference.
But he did admit cash could become rare.
The FIS report also predicts that Australia's embrace of Buy Now Pay Later products will continue, with the market share projected to double from 9.5 per cent in 2020 to almost 20 per cent in 2024.
