A “significant minority” of Australians risk being left behind as the nation races towards a cashless society, a leading expert has warned, as new figures show banks are closing branches and ATMs at a breakneck pace.

Figures published by the Australian Prudential Regulation Authority (APRA) this week show the number of bank branches nationwide has plunged 11 per cent over the past financial year and by 35 per cent since 2018.

ATMs are also disappearing, with the number falling 11 per cent in the year to June, and 55 per cent since 2018.

‘Significant minorities’

Swinburne University adjunct professor Steve Worthington said the reduction in access to cash has hit rural and remote communities particularly hard as Australia races towards a world where cash becomes scarce.

He said the roughly 7 per cent of Australians who used cash for 80 per cent or more of their transactions in 2022 risk being left behind unless governments take action to prevent banks from pulling back their services.

“There are significant minorities in that 7 per cent,” he said.

“Senior citizens who are not digitally native, then there’s also people in rural and regional areas.

“Then we have well over two million people with either no or little access to the internet – how they’re supposed to shift away from using cash is beyond me.”

The latest data shows that cash usage, while falling, is still common, with about $8.5 billion withdrawn from ATMs across Australia in August across almost 29 million separate transactions.

Cash is still needed

RateCity research director Sally Tindall said that while cash is no longer king, we’re not a cashless society “just yet”.

“While the majority of banking services have moved online, some customers still prefer to transact face-to-face,” Tindall said.

“Others rely on in-branch banking because they need to deposit or withdraw large amounts of cash, whether that’s for their business, the local footy club, or to pay for something they’ve bought secondhand to avoid scammers.”

Senate examining closures

Closures in remote and regional areas are potentially more damaging, Worthington said, because internet access isn’t as widespread and there are significant distances between one closed branch and the next one that’s still open.

A Senate inquiry is currently examining whether governments need to step in and regulate bank closures, with a report on the issue due on December 1.

Worthington said concrete policy action is urgent, suggesting Parliament declare cash an essential service in the same way that water and electricity are – putting new guard rails around how many branches banks can close.

“Cash may no longer by king,” he said, “but it’s still in the royal family of payments.”