Barefoot Investor Warns of Potential 'Cash Surcharge' as Australia Moves Towards Cashless Society

Scott Pape, the well-known financial advisor known as the Barefoot Investor, has shared his perspective on the growing concerns surrounding Australia's potential transition to a cashless society. In a recent statement, Pape made a bold prediction about the future of cash payments in the country, suggesting that Australians may face a 'surcharge' for using physical currency rather than a complete elimination of cash.

Pape's comments come amidst an ongoing debate about the decline in cash usage and the challenges it poses, particularly for regional areas where cash remains a popular payment method. Experts have warned that Australia could become 'functionally cashless' by 2025, raising questions about the accessibility and affordability of electronic payment systems for all citizens.

To illustrate his point, Pape pointed to Norway as a case study, where the government is considering legislation to protect citizens' right to pay with cash. He emphasized that while electronic payments have become increasingly prevalent, the Reserve Bank of Australia has a vested interest in maintaining cash as a store of wealth and a backup payment option when digital systems are unavailable or offline.

Why this matters: The potential shift towards a cashless society has far-reaching implications for Australians, especially those in regional areas who rely on cash transactions. Pape's warning about a possible 'cash surcharge' highlights the need for a balanced approach that ensures access to both electronic and physical payment methods without penalizing those who prefer cash.

The debate surrounding Australia's cashless future has been further fueled by the decision of a small regional pub in Western Australia, the King River Tavern, to remain a cash-only establishment for the past 15 years. Owner Sam James made the choice after a severe weather event forced the temporary closure of the pub's restaurant, finding that the fees for EFTPOS equipment were too high. While the cash-only policy has worked well for the pub's regional location, it also presents challenges, such as the closure of nearby bank branches requiring customers to travel long distances to access cash.

As Australia navigates the complexities of a potential cashless society, Pape's insights serve as a reminder that the transition must be carefully managed to ensure fairness and accessibility for all citizens. "Cash won't be permanently removed from society," Pape stated, emphasizing the importance of maintaining multiple payment options to cater to the diverse needs of Australians.

Key Takeaways

• Barefoot Investor predicts Australians may face 'cash surcharge'
• Experts warn Australia could become 'functionally cashless' by 2025
• Norway considering legislation to protect citizens' right to pay with cash
• Small regional pub in WA remains cash-only due to high EFTPOS fees
• Pape emphasizes need to maintain multiple payment options for Australians