Cash can't crash: why physical money is here to stay

Cash will keep on keeping on as a fallback when online payment systems crash, experts say.

It's said money talks, but the conversation about a cashless society has grown 'coinvoluted'.

From credit and debit cards, to digital wallets on mobile phones - the ways Australians now choose to pay has sparked questions about whether cash is becoming obsolete.

While research suggests it may well be, Swinburne University business professor Steve Worthington says it's not.

"I don't see cash withering away within the next couple of decades," he told AAP.

Cash was used in 13 per cent of all payments in Australia in 2022, according to RBA data, which "partly reflects the impact of the COVID-19 pandemic on people's payment behaviour".

The lockdown-era accelerated a decline that had been underway since at least in 2007, when almost 70 per cent of payments were made in cash.

Despite this, Prof Worthington believes it will be a long time before Australians lose the ability to use notes and coins mainly because it's easily accessible in emergencies or outages.

"Cash can't crash," he said.

"When the telecoms break down or the IT systems of the banks break down, you're left high and dry."

A functionally cashless society is inevitable in Australia, according to associate finance professor Angel Zhong, who estimates the future driven by innovation in technology is as close as 2030.

When certain businesses only accepted cashless payment post-lockdown, consumers learned to embrace its convenience.

"It's easy - you just need to carry your phone or mobile devices or your watch," Dr Zhong said.

It's come to a point where people are slaves to their phones, she said, but that's not to say cash will disappear into the abyss.

Physical currency remains crucial for older Australians, regional residents, refugees and those with disabilities, Dr Zhong said.

Along with its accessibility, cash remains an option that gives people freedom of choice in a digitalised world should they not want more of their identity online, Prof Worthington points out.

"One of the downsides of going totally cashless is that we just leave ourselves wide open to more and more scams and fraud," he said.

He believes managing a budget in the cost-of-living crisis could be easier for those paying by cash, referencing a studyled by University of Adelaide PhD student Lachlan Schumburgk.

Mr Schomburgk found people spend more of their hard-earned when they opt for cashless payment.

Physically counting through notes and coins before handing them over forces people to see what they're losing, he told AAP, referring to what psychologists count as the 'pain of paying'.

Mr Schomburgk recommended a return to traditional forms of saving, such as 'cash-stuffing', which involves designating cash in envelopes labelled after different necessities.