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The number of notes in circulation has fallen for the first time since the 1960s.Credit:Gabriele Charotte

Every year since the transition from pounds and shillings to decimal currency,the total value and number of notes in circulation has increased. But that reversed in 2022-23 with a particularly large fall in the number of $50 notes.

Despite the rise of touch-and-go,direct payment and debit cards over the past decade,the number of notes had been increasing. It soared during the COVID pandemic even though many retailers moved to contactless payment systems.

Reserve Bank data shows between February 2020 and December that year,the value of $50 notes in circulation jumped by 24.5 per cent. There was a 15 per cent jump in the number of $100 notes over the same period.

But the RBA’s own regular survey of consumers’ payment trends show three in four Australians are now considered low cash users. They use cash for less than 20 per cent of all their in-person transactions. In 2019,about half of Australians were considered low cash users.

The same survey showed over the past three years,Australians halved the share of cash payments by numbers to just 16 per cent.

New Reserve Bank data shows,as of the end of the 2022-23 financial year,the total value of cash in circulation fell by almost $1.1 billion. There is now $101.3 billion in cash,the smallest amount since November 2019.

The number of $5 notes in circulation has fallen to the lowest point since October 2019. The number of $20 notes (May 2021) and $50 notes (August 2021) is also continuing to drop.

The only note still growing is the rarely seen $100 note,but even that is slowing. The value of $100 notes circulating increased by 7.4 per cent in 2021-22,but lifted by a much more modest 2.4 per cent last financial year.

CommSec chief equities economist Craig James said notes were similar to cheques,which earlier this year the government announced would be wound up as a payment system by 2030.

He said the move by some banks to cashless branches was a sign of the technological change occurring across the payments system.

“We’re turning into a virtual world,” he said.

“The demise of cash is more nostalgic I suppose … but older Australians and some communities will hang on to cash for a little while yet.”

Australia is not alone in the phenomenon. Both the United Kingdom and New Zealand have seen a drop in the number of notes circulating in their economies over the past 12 months after a COVID-era surge.

Independent economist Nicki Hutley says falling cash use will affect older Australians most but will also make life more difficult for criminals.Credit:Eamon Gallagher

Independent economist Nicki Hutley said older,lower-income and people in regional areas were more likely to use cash than other Australians.

She said while these people would be most affected by the shift away from cash,there would be benefits as it would be more difficult for criminals to escape detection.

“Most of us are pretty used to waving our phones around for payment,especially since COVID,but we’re not all making the transition at the same speed,” she said.

“I think it’s a good thing in terms of the black economy. Still too many cash payments avoiding most tax.”

Despite the drop in total notes,there are still 18 $100 and 36 $50 notes in circulation for every Australian.

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