The Barefoot Investor has warned that cash is about to disappear, as shocking new statistics reveal how little Australians use it.
Scott Pape made this surprising admission while responding to a single mother of three who had written to him.
To make ends meet, Rita explained that she became a house cleaner for three wealthy wives and always paid in cash rather than by card at the checkout.
She added that she would use her cash to pay her bills, including rent and groceries, and said that helped her save hundreds of dollars in late fees.
“I am convinced that not only did it save me hundreds of dollars in late fees that you wrote about last week, but it also helped me stay on a budget during an extremely stressful time in my life,” Rita wrote.
Scott Pape has praised a single mother of three for saving money by using cash. However, he added that cash was on the verge of disappearing even though Australians save when they avoid cashless methods.
‘To this day (seven years later), I still withdraw my spending money every week in $50 and $20 bills. Life is simple with cash!’
In his response to Rita, titled “House Cleaner Earns Ph.D. in Finance,” Pape praised the single mother for discovering that using cash saved her money.
Pape referenced a study by the University of Melbourne and the University of Adelaide that analyzed data from 11,000 participants and found Australians were likely to spend more using cashless methods than paying cash.
However, he argued that the use of cash was disappearing despite its ability to save money.
‘Cash is going the way of Kevin Rudd. (He appears from time to time just to let us know that he’s still relevant, only to disappear back into oblivion),” Pape wrote.
‘Cash is now only used for 16 per cent of transactions, and you can bet your shiny little fitty that the Tax Commissioner is the main one to applaud its demise.
‘After all, the ATO’s supercomputer has so much data on you it would make Mark Zuckerberg drool (and it’s getting more powerful with AI).
“Yet, for all its computing power, it’s still no match for a single mom with a vacuum cleaner.”
It comes after Australians rushed to withdraw cash from ATMs across the country as part of a fight against the rise of digital payments.
The massive withdrawal event, called ‘Cash Out Day’, was organized by the Cash Is King Australia Facebook group and took place on June 14.
“Withdraw the money tomorrow June 14,” the group wrote. ‘Bank branch or ATM, take it out, use it, don’t lose it.’
The mother, who worked as a house cleaner and was paid in cash, said she saved hundreds of dollars in late fees by avoiding cashless payment methods.
Many Australians shared photos of themselves withdrawing hundreds of dollars from ATMs.
Some even reported that high demand for cash due to the campaign caused some ATMs to run out of money.
Finder head of consumer research Graham Cooke told Daily Mail Australia that those who paid with cash can avoid additional card charges.
While some larger businesses absorb these costs into the price of their goods and services, many smaller businesses include customers with banking fees.
The most popular way to pay by card is tap-and-go, which accounts for 95 percent of in-person transactions and is the most expensive.
While inserting a card into an EFTPOS machine typically costs a merchant less than 0.5 percent per transaction using contactless Visa and Mastercard, the payout can amount to between 0.5 and 1 percent each time for cards. debit and between 1 percent and 1.5 percent for credit cards.
On a $100 purchase, the average added cost is 28c for EFTPOS, 52c to use the Mastercard network, 47c to use Visa and a whopping $1.88 for digital payments provider Square.