Finance

Australia leads the world for contactless payment but cash still king for small transactions

Engel Schmidl /

Less than 1% of Australians like to make small purchases on card despite the move towards contactless technology, according to a survey published yesterday by business intelligence company RFi.

The survey results reveal while Australians are the highest per capita users of contactless payment technology in the world, with 43% using the technology on a regular basis, we do not use the cards for small transactions.

This has much to do with the reluctance of small business owners to adopt contactless technology because of the charges associated with electronic transactions. Many businesses which do allow customers to buy cheap items electronically often add a surcharge on top of the purchase, intended to offset the eftpos charge.

Businesses in New Zealand do not get charged for card transactions, making the technologies more accessible to Kiwi shoppers – according to the survey, almost 43% of Kiwi shoppers say they prefer using card over cash for small transactions.  

“It’s an issue that any retailer has to consider – you can’t really add 10c on a cup of coffee,” says Peter Strong, executive director of the Council of Small Business of Australia.

Strong told SmartCompany despite the charges making contactless tech unattractive for shop owners, it’s just a matter of time until small businesses jump on board.

“It’s the ease of transaction. Australians are really good at dealing with change, that’s the nature of our society,” he says.

“We just need to make sure the change doesn’t impact on business in a way that isn’t good for the economy.”

Dr Warren Harmer, chief executive of small business advice consultancy Crecer Business Solutions, says small businesses have much to gain in adopting cashless payment technology.

“It’s certainly efficient. The big advantage is that people can spend more spontaneously… It makes [customers] more likely to spend money they weren’t intending to,” he says.

Harmer says while some electronic transactions may take longer to clear depending on how the customer pays, the move towards instant online mobile payments will make life much easier for some businesses.    

“Now that there are a lot of mobile payments available, you can take payments on the spot, and that streamlines the whole process. It’s enormously beneficial for cash flow and efficiency,” he says.

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