Cash suffers COVID crash as digital payments soar

20 September 2021

COVID-19 has accelerated a shift away from physical cash usage, with personal cash deposits and withdrawals plummeting and digital payment volumes soaring, according to new Bankwest analysis of customer payments.

Bankwest compared digital payment data, including mobile and in-app/online transactions, from July 2019 – about eight months before the onset of the pandemic – to July 2021, against cash deposit and withdrawal trends.

The volume of in-app and online payments (such as direct debit and Pay Anybody transactions) grew 22 per cent over the period, as a shift in customer preferences emerged with COVID-19 toward contactless payment options.

The total value of digital wallet payments (those via a mobile device) grew by 313 per cent, as customers became accustomed to the technology, with the average transaction up $6, from $29.60 to $35.60 – a rise of 20 per cent.

The number of digital cards activated in the Bankwest app surged by 277 per cent, while the volume of digital wallet transactions leapt 240 per cent over the same two-year period.

The increasing shift to digital payment options was in stark contrast to cash withdrawal and deposit data, with the average number of withdrawal transactions by Bankwest customers falling by 11 per cent over the two-year period.

Cash deposit figures were also telling, with the volume (36%) and value (37%) of business deposits down by more than a third, and personal cash deposits dropped 30 per cent by value as customers shifted to digital options.

Despite the drop in cash deposits, Bankwest personal savings data showed balances grew 11.2 per cent in the past 12 months, indicating that, on average, customers were saving more, but with savings coming less from cash.

Bankwest Chief Customer Officer Paul Vivian said: “We’ve consistently seen customer saving, spending, and preference behaviours adapt to life with COVID-19, and these figures paint a clear picture of yet another shift.

“The use of physical cash has been on the wane for some time, but this data suggests that trend has accelerated with the global pandemic, with more people using and feeling more comfortable with digital payments.

“We wanted to understand the flow-on effects of digital wallet adoption and, while it’s far more challenging to track the use of cash than digital payments, looking at withdrawal and deposit figures can provide an understanding.

“Our Spend Trends analysis shows many business sectors are back at pre-pandemic turnover levels, yet the decline in cash deposits shows customers continue to spend, but increasingly via tap and pay services and digital wallets.

“Cash withdrawals are, not surprisingly, also down as a result, while the fall in the number of personal cash deposits paints a picture of significantly less cash circulating, with contactless payments increasingly the norm.”

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