Australian bank begins eliminating cash services

Australian bank ANZ will no longer be handling cash at certain branches in an effort to support more digital transactions, the bank confirmed Thursday.

In a report published last month about a coming “digital wave” ANZ noted that digital payments are becoming a growing preference over physical payments like cash.

“As consumers become accustomed to digital and even invisible payments – think transport apps automatically taking care of payment – they increasingly regard making physical payments as an inconvenience,” said ANZ Worldline Payment Solutions Chief Market Officer Anne McDonnell.

The bank also expressed enthusiasm for central bank digital currencies (CBDC), which are digital currencies issued and governed by a central bank. Unlike with cash, transactions performed with CBDC are not anonymous and have the potential to be monitored — and even controlled — by authorities.

Several countries, including Australia, are currently exploring and testing their own CBDCs and how they can be used for both domestic and cross-border payments.

“Right now, it takes anywhere up to T+2 to settle various market transactions and much longer for other asset classes. The digital asset world has shown us we can settle large asset transfers instantly,” said International ANZ Industry & Innovation Lead Balaji Natarajan. “There is considerable appeal for wholesale CBDCs and it’s just a matter of time before various countries roll them out for both domestic and cross-border transactions.”

Now ANZ has stopped handling cash at a “small number of branches” though customers may still withdraw cash from ATMs.

“At these branches, cash and cheque deposits and cash withdrawals can continue to be made by using our Smart ATM and coin deposit machines and we have staff on hand to help customers that might be using them for the first time,” said ANZ in a statement to news.com.au. “Our customers are changing how they bank with more than a 50 per cent decline in in branch transactions across ANZ over the past four years.

“Only eight per cent of our customers solely rely on branches for their everyday banking needs, with the majority preferring online and mobile banking methods. Today, many customers visit our branches to discuss more complex and big financial decisions, like borrowing for a new home or establishing business accounts for a new business.”

In the UK, four of the largest banks will be closing their branches to accommodate the rise in digital transactions. NatWest Group, which includes NatWest, the Royal Bank of Scotland and Ulster Bank, will have shut down 1,257 branches by the end of this year. Lloyd’s Bank will be shuttering 39 branches, Barclay’s will be closing 14, and HSBC will shut down 114 locations between April and August this year.

“Our customers are increasingly using digital channels to manage their money – we now have over 20 million regular digital users, so it’s important we continue to develop the online services our customers want to use,” a Lloyd’s Banking Group spokesperson told The Guardian.

A spokesperson for NatWest said: “We take our responsibility seriously to support the people who face challenges in moving online, so we are investing to provide them with support and alternatives that work for them.”

Some countries are looking to phase out cash completely in favor of a completely digital financial structure.

In Nigeria, people are taking to the streets in protest to demand a return to cash after the government began forcing its CBDC on citizens. 

The country’s central bank debuted Africa’s first CBDC in late 2021 but the digital currency was given a cold reception as less than 0.5% of Nigerians used it. To try coaxing citizens into adopting CBDC the Nigerian government removed restrictions that required bank accounts to use CBDC. When that didn’t work the government offered discounts on cab fares if riders used CBDC to pay.

When neither of those worked the Nigerian government launched a war on cash and restricted cash withdrawals to 100,000 naira ($225) per week for individuals and 500,000 naira ($1,123) for businesses. At the same time the government also decided to redesign the currency, which limited banks’ cash reserves while they waited for the newly designed currency.

Nigerians have reportedly erupted in protest over the cash restrictions but the government is doubling down. Central Bank of Nigeria Governor Godwin Emefiele said, “The destination, as far as I am concerned, is to achieve a 100% cashless economy in Nigeria.”

Israel is looking to follow in the Nigerian government's footsteps as far as phasing out cash.
As reported by Frontline News, Israel has already begun restricting cash transactions and even the amount of cash an Israeli citizen can keep at home. 

While the State of Israel mentions money laundering and tax evasion as justifications for these laws, they are not the only factors. The government also aims to control how citizens spend their money and ultimately phase out cash altogether, allowing only digital payments. 

“The Law for the Reduction in the Use of Cash was designed to change the public’s consumption habits and encourage a switch to digital means of payment, with a view to almost complete replacement of the use of cash in the future,” reports Globes.