An important discussion about the future of cash across Australia with Robbie Barwick from The Australian Citizens Party.
The CEO of CBA Matt Comyn floated the idea of limiting cash transactions to $500, so we pull this apart in the context of the Use Cash campaign which ran successfully on the 2nd April.
See my earlier show for detail of that campaign, and the Senate interrogation of the RBA which we also discuss. The Fight For Cash Just Got Terminally Serious! https://youtu.be/LiNSH7I_8xs
In the most recent incident of card fraud: the gross amount withdrawn or used for all incidents was $2.2 billion while the net loss after any reimbursements paid for all incidents was $476 million. The median amount withdrawn or used per incident was $200, A further 514,300 (2.5 per cent) experienced some kind of scam, and just under 200,000 (1.0 per cent) were victims of identity theft.
The proliferation of the digital world has opened the door for more scans, so we need to be careful with the information we share, the links we click, and monitor statements to look for fraudulent transactions. This is another area where financial education needs to be enhanced, in school and beyond, as many people are too easily caught. Its important to be digitally smart. Maybe cash is safer and easier to manage. Worth thinking about in the context of the current drive to removed cash all together.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The Commonwealth Bank subsidiary Bankwest, the 130-year-old former Bank of Western Australia bank announced last Wednesday that it was moving to become a digital-only bank and would close 45 locations in the state. The 45 Bankwest branches that have been earmarked for closure will close their doors by October this year. There are 28 locations in Perth and 17 in regional WA. A further 15 branches will be rebranded under the Commonwealth Bank banner and are expected to finish their transformation by the end of the year.
Yes, this is the same CBA whose CEO Mat Comyn on 20th September 2023 in a statement to the Senate Inquiry into regional branch closures promised not to close more branches until at least 2026, even though they specifically excluded Bankwest from their statement, while saying “we recognise the unique and important contribution that regional Australia makes to our country”. “Our decision to pause regional branch closures is also predicated on customers and communities valuing our decision to stay”.
Committee member Senator Richard Colbeck said the Senate committee has been hearing plenty of people raising concerns about the vital banking services being lost.
“Every week in our hearings we hear from local communities how important these essential services are and how their communities are affected, yet those who are given a license to provide those services, the so-called service sector, continuously ignore those pleas and withdraw services – it is as though their ears were painted on,” he said.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited version of a live discussion with Robbie Barwick from the Citizens party.
The Senate will be delivering their report on Regional Banking, and it will be important to ensure access to cash is protected in an era of CBDC. And we need to ensure the Government does not outsource its fiscal and monetary authority to the Reserve Bank. Behind these issues is the question of power, and tyranny. Who is setting the agenda, and who is in control?
Original stream with chat replay here: https://youtube.com/live/7Or8ais2WxI
If you have savings with a bank in Australia, it is highly likely you are being ripped off. After all, Australian Consumers depend on retail deposit products to conduct their everyday banking, to safely store over $1.4 trillion of their savings and, importantly, to earn a decent return on these funds.
However, as I have been highlighting in recent shows, changes in the cash rate (often referred to as the ‘official interest rate’) via the RBA, and which is the rate paid on lending between banks in the overnight cash market only indirectly affect the cost of funding from retail deposits and the interest rates paid on retail deposit products.
Banks are quick to lift mortgage rates on mortgages, but have been significantly less market driven in terms of deposit rates, with many savers loosing out. Yet relatively few consumers switch deposit products, despite there often being a range of alternative products offering better interest rates and conditions. This loyalty tax means consumers earn significantly less than they should, over all on deposits, which boosts bank profits significantly.
So now the ACCC just completed a report on Retail Deposit Account. They gathered information, and documents on retail deposit products supplied by 14 of the largest banks in Australia. These banks collectively hold more than 90% of household deposits in Australia. This included seeking information directly from these banks as to their retail deposit products and from APRA and RBA, as well as reviewing the information available to the public on the banks’ websites.
The ACCC findings highlights that despite the importance of transaction accounts, savings accounts and term deposits, the ongoing challenges consumers face in searching for, comparing, and switching between products means that consumer engagement with the market for retail deposit products is relatively low. This low level of engagement means many consumers miss out on earning more from their savings.
Widespread strategic and selective pricing also adds difficulty for consumers when seeking to locate key product information and compare market offerings. This lack of transparency may also damage consumer confidence in the market.
Given the range of factors that banks take into account and the strategic pricing approaches they employ when setting their retail deposit rates, the interest rates received by consumers do not automatically follow movements in the cash rate target.
More reports of banks removing cash services, at a time when the Senate Inquiry into Regional Branch closures highlighted again the need for access to cash.
According to the Bank of England, cash is still important for several reasons. Cash is a fast and convenient way to pay. It is widely accepted. It is helpful for budget management. Cash payment is entirely anonymous. Moreover, cash is a stable currency system that is resilient in times of crisis and reflects a nation’s identity . It is also the most secure means of payment.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
An average of more than 50 UK bank branches have closed each month since 2015 and campaigners fear some retailers could stop accepting cash if it becomes too burdensome to process. That said, under government rules, free withdrawals and deposits will need to be available within one mile for people living in urban areas. In rural areas, where there are concerns over “cash deserts”, where the maximum distance is three miles.
This is important because cash remains a necessity for millions of people, research has found, with the elderly and those with disabilities among those likely to struggle. Branches have been more likely to close in disadvantaged areas.
Of course, Banks have pointed to the large reduction in branch use – a trend accelerated by the Covid pandemic – and the popularity of managing money via smartphones, as good reason for diluting their branch network.
But a recent survey by Age UK suggested that, among those who were uncomfortable about digital banking, the key concerns were fraud and scams, a lack of trust in online banking services, and a lack of computer skills.
And now, The British Retail Consortium says cash use has grown for the first time in 10 years as shoppers keep a close eye on their budgets while prices rise, retailers have said. They said 19% of purchases were made with notes and coins last year, echoing a report by banks showing a slight rebound. That’s up from 15% the previous year. Until 2015, notes and coins were used in more than half of transactions and, while card use now dominated, cash still had its benefits. Consumers made smaller but more frequent payments, the survey found.
The consortium said consumers were budgeting carefully to try to cope with cost of living pressures, and there was also a “natural return” for cash after it slumped during the pandemic.
It is essential use of cash is protected, you cannot leave it to the market, where banks are making a killing from extra fees on card transaction costs as a result of removing access to cash.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
More evidence from the Senate last week, concerning the impact of bank branch closures. The Small Business Ombudsman calls out what is wrong with the current system, and why small business is being degraded. He makes a strong case for significant change!
This is the fourth segment following the recent hearings in Canberra in the Senate Rural and Regional Affairs and Transport References Committee, on Friday 1st December 2023 and relating to bank branch closures.
This is the third in a series of posts following the recent hearings in Canberra as the Senate Rural and Regional Affairs and Transport References Committee heard from Dale Webster, from The Regional. She and I wrote to the Committee to get this inquiry up and running.
On Friday 1st December 2023 the Senate took evidence in Canberra relating to bank branch closures.
On Friday 1st December 2023 the Senate took evidence in Canberra relating to bank branch closures. This is the first of a series of posts which presents some of the important evidence, as the Senate Rural and Regional Affairs and Transport References Committee heard from the Licenced Post Office Group (LPO).
