The end of the EFTPOS machine? Going cashless and cardless


The pandemic has fast-tracked the evolution of cashless and cardless payments. And, with some new payment options on the horizon, the onus is on businesses to adapt and make it as easy as possible for customers to pay.

At a glance

Here’s a summary of the key insights from our interviewees:

  • Adoption of cardless payments has accelerated beyond expectations the past two years, including those made by digital wallets and wearables.
  • QR codes and PayID are set to become more important payment methods.
  • Many businesses are ditching cash transactions altogether. One in 12 didn’t accept cash in 2020, and in 2021 that figure had reached one in four.

The global pandemic fast-tracked adoption of cashless and cardless payments across the board, changing the way consumers pay for goods and services and, consequently, how businesses accept those payments.

Digital wallets, for example, have almost doubled in popularity, from 36 million monthly uses in Australia in 2020 to 68 million in 2021. Despite that mammoth growth, card use dwarfed cardless, notching up 9.8 billion transactions in 2019, increasing to 11.9 billion in 2021.  

Buy now pay later – so ubiquitous it’s now better known as its acronym ‘BNPL’ or by the brands that dominate locally: Afterpay, Zip Co, Openpay – had already topped $9 billion in transactions in 2019/20. 

 This major shift in how we pay for goods and services on a day-to-day basis – away from cash – is predicted to continue to evolve.  

RBA data analysed by the Australian Banking Association shows a sharp 2020 dip in what had previously been a gradual decline in ATM withdrawals – from almost 44 million withdrawals at the end of 2019 to a low of just over 22 million in April 2020. Even with a recovery in the sharp decline, transaction numbers didn’t quite reach 35 million around Christmas 2020, and the downward trend continued into 2021.

“We’ve not seen new payment types emerge, but we’ve certainly seen an acceleration of certain payment types that were already around pre-COVID,” says Peter Thomas, Chief Customer Officer at Smartpay.

“There are obviously a few factors driving that. In addition to concerns over the transmission of COVID, we’ve seen an increase in digital wallets and wearables – people don’t always want to take a wallet out with them as well as their phone or watch, and COVID certainly escalated the speed of change.”

Peter says that research his company has done based on transaction data shows that, despite the increasing numbers of digital wallets and wearables, most people are still preferring to pay by card. 

“While the numbers of digital wallet and wearables transactions have increased significantly, the numbers are still small in the context of overall card payments,” he says.

QR codes: more than just a check-in  

 While new payment methods haven’t had a great impact on the way transactions are processed, they are likely to soon.  

We’re all well accustomed to using QR codes to check into venues in many parts of the country. Unsurprisingly, businesses are exploring how they can piggyback on this now-widespread user recognition of QR codes.


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PayID – the next stage of cardless payment evolution?

Many customers will have made payments using PayID. In fact, 8.4 million Australians have registered for the system, which enables users to receive payments via their phone numbers.  

It has potential that many businesses are exploring, says Peter. 

“I was at a market stall the other day that sells paintings, and the person behind the counter said, ‘Just pay it by PayID and I can see it straight away and you can take the goods’,” he says.

“I can’t remember the last time I carried cash – if I want to buy something and the retailer doesn’t accept contactless payment I move on.”

Peter says that QR codes could be of use here too, as a code could take you through to PayID to complete the transaction. But while a market stall is a great anecdote, it’s not necessarily a use case that matches customers’ expectations in dealing with all businesses, even small businesses. 

“The challenge is to incorporate that into an overall payments experience,” Peter says. “I think it’s probably a little way off until we see a real commercial PayID model that works.” 

Making payments work for your business – and your customer

The need to accept card and cardless payments is now almost a non-negotiable, and many are ditching cash altogether as part of this shift.

Payment platform Square tracked “a cashless growth spurt” through 2020 and into 2021. Among businesses that operated continuously between February 2020 and February 2021, one in 12 were cashless in February 2020. Just two months later, one in three were. And by February 2021, that trend had only wound back slightly, with one in four operating as entirely cashless.  

“I think the ATO and the government will certainly encourage a move to a cashless society,” says Peter. 

“From a personal perspective, I can’t remember the last time I carried cash – if I want to buy something and the retailer doesn’t accept contactless payment I move on.”

A golden rule in business is to make it as easy as possible for a customer to complete their transaction, and payment is a ‘grudge’ point in any business transaction – so ultimately that means making payments as quick and easy as possible.

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