Based from the data of transactions administered by payments company Square, the report found that between January and June this year, April was the month that saw the biggest drop in cash use across the country.
The ACT saw the most substantial abandonment of cash, with cash payments plummeting from 42 per cent of transactions in January to just 14 per cent of sales during April.
Tasmania, South Australia and Victoria closely followed, with cash sales in those states also dropping by more than half over the same time period.
The Northern Territory remained the most committed to cash, with around one in five Territorians (19 per cent) still opting to pay with physical money during the peak of the pandemic’s first wave.
Based on industry, charitable organisations have shifted most dramatically away from cash, with donations made in cash dropping by more than half, from 46 to 23 per cent.
Cash payments at cafés and restaurants also dropped by more than half, from 36 to just 14 per cent.
Professor Steve Worthington from Swinburne University Business School said the ongoing pandemic is only serving to sharpen the shift we’ve seen over recent years, where consumers and businesses are increasingly prioritising digital forms of payment.
“There are a number of factors contributing to the steep decline in cash use as a direct response to the pandemic,” Professor Worthington said.
“For consumers, fears over social distancing and a preference to minimise contact with physical currency is likely to be top of mind.
“What’s more, with banks closing branches, reducing operating hours and fewer ATMs available, there’s less cash in circulation. Combining that with the fact that many businesses favour digital payments for speed and security, there’s less incentive now for any of us to carry cash.”
Square Australia head of business development Colin Birney said that as the COVID-19 pandemic began to sweep across Australia, so too did health and safety concerns among business owners.
“This raised questions of how to properly conduct business and accept payments during social distancing and stay-at-home mandates,” Mr Birney said.
“The result has been a significant shift by many Australian businesses away from cash, although we have seen variances across industries and in different parts of the country.”