Navigating the impact of a cashless society on older Australians

In the dynamic landscape of financial evolution, the shift towards a cashless society stands as a hallmark of progress. This transition promises unparalleled convenience, but it also sparks pertinent questions about its impact, especially on vulnerable segments of society. Today, we delve into the implications of this shift for our elderly population, considering both the conveniences and concerns that arise.

Understanding the Changing Landscape:
Australia, like many nations, has witnessed a shift in payment methods. While businesses are legally required to accept legal tender, the discretion of the business owner regarding the method of payment has led to instances where cash is declined. Even government-run services are embracing this change.

Surprisingly, a 2020 statement from the eSafety Commissioner highlighted that 75 percent of older Australians voiced concerns about the safety and security of online banking. Furthermore, a national research study revealed that 45 percent of respondents over 50 had encountered issues such as viruses, scams, credit card fraud, or personal information theft.

Rise of Digital Transactions:
The journey towards a cashless society began decades ago, with the introduction of the Bankcard system in 1974 and the EFTPOS system in 1983-1984. These innovations marked the dawn of digital payments in Australia. Since the mid- to late-2010s, smartphones have become vessels for digital wallets and touch-and-go payments.

For the tech-savvy and digitally connected, the transition to a cashless society can be seamless and even enjoyable. Online banking, mobile payment apps, and contactless transactions have undoubtedly simplified our lives. However, the convenience that these innovations offer might not be equally accessible to everyone, especially seniors who may not be familiar with technology.

Challenges Faced by the Elderly:

1. Digital Literacy Gap: Many elderly individuals grew up in a time when digital devices were nonexistent. Navigating smartphones, computers, and apps can be intimidating for them. Without proper support, understanding how to use these tools for financial transactions can be a significant barrier.
2. Dependency on Physical Money: The older generation has often relied on physical currency for decades. The tangible nature of cash provides a sense of security and familiarity that digital transactions may not replicate. The loss of this tactile connection can lead to feelings of uncertainty and vulnerability.
3. Isolation and Dependence: For many seniors, a trip to the bank or local store was not just about transactions but also an opportunity for social interaction. The shift to online banking and cashless transactions might inadvertently increase their isolation, as these routine outings diminish.

The Pros of Digital Payments for the Elderly:
Interestingly, the shift towards digital payments can potentially bring some benefits to older individuals who are at risk of certain challenges:

1. Financial Elder Abuse: The transition away from physical cash can potentially reduce instances of financial elder abuse, where individuals are coerced into giving away their money.
2. Scams and Exploitation: Older Australians often face scams and deceptive marketing in the realm of online shopping. The shift to digital payments could introduce safeguards against such exploitative practices.
3. Unauthorised Access: The risk of unlawful bank account access by unscrupulous third parties might decrease in a digital environment due to enhanced security measures.

Addressing Concerns and Ensuring Inclusivity:
While the benefits are noteworthy, it is crucial to address the concerns of our elderly population. As experts predict that only two percent of point-of-sale transactions will involve physical cash by 2025, we must ensure that no one is left behind. Initiatives such as providing digital literacy programs, enhancing customer service for seniors, and maintaining the availability of physical payment options can help bridge the gap.