Walk into almost any cafe in Melbourne or Sydney and try to pay with cash. You’ll probably get a look. Not outright refusal — not yet — but definitely a pause. The card reader is right there. The tap-and-go terminal. The QR code on the counter.

Australia has been sprinting toward a cashless economy faster than almost any country on earth. And we’re not slowing down.

Where We Are Right Now

The Reserve Bank of Australia has been tracking the decline of cash for years. Their consumer payments survey shows cash accounted for just 13% of transactions in 2022, down from 70% in 2007. The latest figures suggest that number’s dropped even further.

Meanwhile, digital wallets — Apple Pay, Google Pay, Samsung Pay — have gone from novelty to default. For younger Australians especially, the physical card itself is becoming redundant. Your phone is your wallet.

The New Payments Platform (NPP) and its consumer-facing service PayID have made real-time bank transfers possible. No more waiting for overnight processing. Send money to a phone number or email address, and it arrives in seconds.

Buy Now, Pay Later Grows Up

The BNPL sector had its wild phase. Afterpay, Zip, Klarna — they grew fast, attracted regulatory scrutiny, and then went through a brutal correction. Afterpay got absorbed into Block (formerly Square). Several smaller players folded.

But the underlying model hasn’t gone away. It’s evolved. BNPL is now being integrated directly into banking apps and credit card offerings. The big banks saw the demand and responded. Commonwealth Bank’s StepPay and similar products from ANZ and Westpac are examples of incumbents absorbing what was once a disruptive threat.

The regulation side has caught up too. ASIC now oversees BNPL products under expanded credit laws, which means more consumer protections but also more compliance costs for providers.

Crypto: Still Here, Still Complicated

Despite the crashes, the scandals, and the general public scepticism, cryptocurrency hasn’t disappeared from the payments conversation. It’s just become less loud about it.

A small but growing number of Australian businesses accept Bitcoin and Ethereum. Some via payment processors that convert to AUD instantly, removing the volatility risk for the merchant. It’s niche, but it’s real.

The bigger story is central bank digital currencies (CBDCs). The RBA has been running a pilot program exploring a digital Australian dollar. It’s still early days, and there’s no guarantee it’ll launch as a consumer product. But the research is serious, and the implications are significant — particularly for monetary policy and financial inclusion.

Open Banking Is Quietly Reshaping Things

Australia’s Consumer Data Right (CDR) framework — sometimes called open banking — hasn’t had the public impact many predicted. Most consumers don’t know it exists. But behind the scenes, it’s starting to change how financial products are built and distributed.

The idea is straightforward: you own your banking data, and you should be able to share it with accredited third parties. That enables better loan comparisons, smarter budgeting apps, and more personalised financial products.

The uptake has been slower than the government hoped. The accreditation process is expensive and time-consuming, which has kept smaller fintechs out. But as the ecosystem matures, expect to see more practical applications filtering through to everyday users.

What’s Coming Next

A few trends worth watching:

• Account-to-account payments. Instead of card networks taking a cut, payments move directly between bank accounts. The NPP infrastructure supports this, and it could significantly reduce transaction costs for merchants.
• Biometric payments. Paying with your face or fingerprint, no device needed. Already happening in parts of Asia. Australia will likely follow within a few years.
• Embedded finance. Payments become invisible. You order a ride, get out of the car, and the transaction happens automatically. No tapping, no swiping, nothing.
• Cross-border improvements. Sending money overseas is still slow and expensive compared to domestic transfers. New corridors and partnerships are gradually fixing this, but there’s a long way to go.

The Cash Question

Should we be worried about losing cash entirely? There’s a fairness argument here. Not everyone has a smartphone or a bank account. The elderly, the homeless, people in remote communities — a purely digital system risks excluding them.

The RBA has said it wants to ensure cash remains available for those who need it. But availability and acceptance are different things. If no merchant takes cash, it doesn’t matter that ATMs still exist.

It’s a tension that’ll define Australian payments policy for the next decade. Technology is pulling in one direction. Equity is pulling in another.

The future of payments in Australia isn’t just a tech story. It’s a social one. And getting it right matters more than most people realise.