Westpac has introduced major changes to the way customers use their debit cards, enacting a default cash withdrawal limit of $1,000 amid declining levels of cash withdrawals across the country.
The main bank will also limit transaction limits to a default value of $8000 when selecting a ‘credit’ payment; Currently, a customer’s limit on tapping, inserting or making online payments with a debit card is their available balance.
Customers will still be able to set different limits for cash withdrawals.
This comes after the Reserve Bank of Australia (RBA) discovered on June 15 that there had been a sharp decline in cash transactions across the country.
“Most Australians now use cash infrequently,” said the RBA Attitudes and Cash Use in Australia June 2023 Newsletter read.
“In fact, 72% of Australians were classified as ‘cash-little users’ in 2022, using cash for 20% or less of their in-person transactions, compared to 50% in 2019.”
The number of ‘cash deep users’ – Australians who use cash for 80 per cent or more of their in-person transactions – now make up just seven per cent of the country’s population, half what they were in 2019.
US-based financial technology company FIS has found that Australians are among the lowest cash users in the world, second only to Norwegians.
In it survey of 40 countries Australia was found to have the lowest cash usage in the Asia Pacific region in 2022, with cash payments accounting for just six per cent of point-of-sale transactions.
It was followed by New Zealand with 7 percent, China with 8 percent and South Korea with 11 percent, who have widely adopted electronic payment systems.
Commonwealth Bank credit cards have a withdrawal limit of $1,000 which can be changed up to a maximum of $2,000, while ANZ and NAB have limits of $1,000 and $2,000 respectively.
Under current federal law, all businesses are required to file a Threshold Transaction Report (TTR) when providing a service that involves the transfer of $10,000, or the equivalent in foreign currency.
The government enforces TTRs to help detect and disrupt criminal and terrorist activity.
Westpac customers will be able to change their debit card limits after August 20 on the Westpac app, online, by phone or by visiting a branch staff.