Payments and the Pandemic

How COVID-19 Has Transformed Australia’s Relationship with Cash

The COVID-19 pandemic changed the world in 2020. Not only did it force us to reconsider the way we interact with others but also the way we go about our day-to-day lives. The pandemic has changed the way we work, learn and travel as social-distancing guidelines and mandated stay-at-home orders have led to a more virtual existence, both personally and professionally.

How to conduct business during lockdowns, social-distancing mandates and ongoing trading restrictions has become the biggest challenge facing Australian business owners. Square has taken a look back at the year that was, crunching the numbers from millions of transactions made at thousands of Square businesses across the country since February 2020, to reveal how the pandemic has seemingly changed our relationship with cash forever.

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Australian Businesses Are Going Cashless

Australian businesses experienced a cashless growth spurt throughout 2020. Of the businesses that have been continuously operating over the past 12 months, the number operating as cashless grew from just 8% in February 2020 to 37% during April, when stay-at-home mandates were first enforced across the country.

Growth of Cashless Businesses in Australia

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Which States Are Leading the Cashless Charge?

Victoria saw the most significant rise in the number of cashless businesses operating throughout 2020. Just 5% of the state’s businesses were operating as cashless in February, compared to a peak of 40% in April and again in August, coinciding with the state’s two lockdown periods.

While the number of cashless businesses in the Northern Territory still doubled over the course of 2020, this region saw the least dramatic shift away from cash use.

Share of Cashless Businesses by State

From February 2020 to February 2021

Line graph showing the rise of cashless businesses across states, with Victoria leading.
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Are Consumers Less Reliant on Cash in 2021?

Across the country, payments being made in cash have plummeted by more than half over the past 12 months. While cash use has increased a little since the pandemic’s first wave early last year, as of February 2021 it made up just 18% of all in-person transactions – still half of what it was this time last year.

Percentage of Cash Payments

Across the states, Tasmania and the ACT saw the most significant decline in cash use among consumers, while Western Australia and the Northern Territory saw the smallest shift. As of February 2021, Victoria and Western Australia had the lowest rates of cash use in the country (15%), while South Australia and the Northern Territory had the highest (22%).

Decline of Cash Use Among Australian Consumers

Percentage of All In-Person Transactions Made with Cash

Line graph showing the decline of cash use among Australian customers; minimum identified in April 2020 as peak pandemic
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Are All Industries Turning Cashless?

The number of businesses operating as cashless across all major industries increased more than threefold over the first six months of 2020. Retail led the charge, while charities and food and drink sellers, including restaurants, also shifted dramatically away from cash.

While businesses in retail and the home and repair sectors are still the most active when it comes to cash use, they still have not seen a return to pre-pandemic levels.

Share of Cashless Businesses by Industry

From February 2020 to February 2021

FEB 2020
APR 2020
FEB 2021
Stacked bar graphs with illustrated icons showing the share of cashless businesses by industry in Feb 2020, April 2020, and Feb 2021
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The Rise and
Rise of Online Payments

Online ordering, contactless payments, curbside pickup and no-contact deliveries have become the norm for consumers across the country as many people turned to the ease and convenience of eCommerce during the pandemic.

The share of Australian businesses accepting online payments with Square has increased more than 1.5 times over the past year.

Percentage of Businesses Accepting Online Payments

Infographic showing 19% in Feb 2020 and 29% in Feb 2021

Share of Businesses Accepting Online Payments in Australia

From February 2020 to February 2021

Line graph showing the growth of online payments in Australia, with 1.5x growth over the past year


What's Next?

Cash use has been steadily declining in Australia over recent years, and the ongoing pandemic is only sharpening the shift we’ve been observing, where consumers and businesses alike are increasingly prioritising digital payments over cash.

This is not unique to Australia, with Square observing similar trends in other major markets including the U.S., Canada, Japan and the UK. While cash has not completely disappeared, for now, it seems businesses and consumers across the world have become more reluctant to handle cash at a time when health and mitigating the spread of germs is their top priority.

Read our methodology >