Demand for coins and notes surges in Australia, despite COVID-19 cash shun

Damien Larkins 25 June 2021 37
Blank coins fall from conveyor belt at Royal Australian Mint

Orders of new coins from the Royal Australian Mint have spiked despite the ongoing COVID-19 pandemic. Photo: Royal Australian Mint.

Demand for coins has doubled and demand for notes has tripled in Australia during the past year despite a push for cashless transactions in the COVID-19 pandemic.

It seems almost every business now has signs encouraging customers to use card or electronic transfer instead of cash to lower the risk of COVID-19 transmissions.

So it comes as a surprise that demand for cash has significantly risen.

The Royal Australian Mint in Canberra says it put approximately 175 million new coins into circulation during the 2020-2021 financial year.

That’s almost twice the 91 million total in 2019-2020.

READ ALSO: New coin commemorates the 50th anniversary of the Battle of Long Khanh

Royal Australian Mint’s chief executive officer, Leigh Gordon, said it was unexpected.

“We’ve been quite surprised by the demand for coins we’ve seen during the past 12 months,” he said.

“[It’s] more demand for circulating coins than we expected across the period of COVID-19.”

The Reserve Bank of Australia (RBA), which oversees the nation’s banknote production and circulation, also saw a surge in demand during the pandemic.

An RBA report released in March this year found that from March 2020 to February 2021, the value of banknotes in circulation rose 17.1 per cent to $97.3 billion.

That’s more than triple the average growth of five per cent per year during the past decade.

A hand takes several notes of Australian currency from a wallet

The Reserve Bank of Australia says people are holding onto cash, especially $50 notes, as a precaution. Photo: Damien Larkins.

Demand grew mostly for larger notes, with $50 notes comprising around 70 per cent and $100 notes 20 per cent.

The RBA puts the spike down to people holding onto cash as a precaution or to store wealth.

“The demand for cash during the COVID-19 pandemic has likely been driven by hoarding behaviour,” said the report.

“[Possibly] a general sense of uncertainty or because they were concerned about possible disruptions to electronic payment systems during the pandemic.”

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Mr Gordon said notes and coins are generally preferred for small transactions by older people and in teaching financial literacy.

But cash in hand also provides a sense of security during tough times.

“People just take hold of their cash across the period of uncertainty,” said Mr Gordon.

“[In] the bushfires that we had, there was a time there down on the South Coast where the EFTPOS machines were down and there was no power.

“You had to pay for your fuel with cash.”

'Cashless payment only' sign at cafe in Canberra

Most businesses moved away from cash transactions during the COVID-19 pandemic. Photo: Damien Larkins.

The majority of the extra production was for the lower-denomination silver 5 cent, 10 cent, 20 cent and 50 cent coins.

Interestingly, $1 coins didn’t experience the initial spike in demand.

Mr Gordon said the South Australian Government’s move to allow poker machines to accept notes in late 2019 caused the anomaly.

“[Gaming organisations] actually gave their stocks of $1 coins back into the circulating pool and they got redistributed,” he said. “So we went for a few months where there weren’t many $1 coin demands.

“But they have started up again with the recent demands from the banks. The system has rebalanced itself.”

A pile of new $1 coins at Royal Australian Mint

The $1 coin was least in demand during the COVID-19 pandemic due to an influx from South Australia. Photo: Royal Australian Mint.

Stockpiles of coins are held by the Royal Australian Mint to accommodate demand fluctuations and trends.

But it can ramp up production when required.

“We can see that buffer stock starting to be drawn down on and we can start producing it ourselves,” said Mr Gordon.

“We can respond in three months to something like this.”

READ ALSO: A little from every dollar going a long way in the community

The Royal Australian Mint doesn’t expect coin demand to snap back to pre-pandemic levels any time soon.

“It’s been a blip up to a new level that’s going to start decaying down,” said Mr Gordon.

“We’re expecting increased demand will probably reduce, but will continue at a higher number during the next couple of years.”

He said the Royal Australian Mint is focusing on growing investment in collectible coins in the long-term future.

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37 Responses to Demand for coins and notes surges in Australia, despite COVID-19 cash shun
XK140 XK140 4:51 pm 01 Jul 21

Went to Capital Brewery and ordered a round of drinks. Went to pay cash and told card only. So I left drinks on counter and haven’t been back. Cash is legal tender….

    JC JC 6:07 pm 01 Jul 21

    Cash may well be legal tender but there is no requirement to accept it.

    Australian business may set commercial terms which stipulates what payment methods will be accepted. When you buy something you are entering into a contract of sorts where you accept those terms.

    If you don’t want to accept those terms you are free to go somewhere else. The choice is yours.

longlunch longlunch 8:26 pm 28 Jun 21

I couldn’t tell you the last time I used (or even had) cash. 2017-18 maybe? And there has been no need to carry credit or debit cards for a couple of years either as they can all be stored on your phone or watch. Can we hurry up and get drivers licenses and passports electronically too please!

James Smith James Smith 3:55 pm 27 Jun 21

Cash never goes down or out of service.

Lizzi Sabo Biro Lizzi Sabo Biro 2:47 pm 27 Jun 21

Yes I agree

Jane Stubbs Jane Stubbs 2:16 pm 27 Jun 21

Twice I have been unable to purchase coffee or take my Dog to the vet as the businesses involved do not accept cash. Is cash not legal tender? I should not be penalized because of my choice of payment.

Maya123 Maya123 1:10 pm 27 Jun 21

I rarely use cash now. Mostly I use a credit card, as I like the points. I pay off the credit card each month, so never incur interest. The points add up. One time I got $1,500 back and another $800. In the past I have also got airline tickets for points. Don’t get plane tickets now, as I can find better deals, so take the cash. I wouldn’t have got that if I had used cash. I put everything that I can on my credit card.

I do use cash occasionally, if say in a situation where I can bargain.

    Maya123 Maya123 4:10 pm 27 Jun 21

    Adding, I do carry some cash, and when travelling have enough to use if the internet goes down. I struck this at a roadhouse in the middle of the NT. The phone line went down and therefore credit cards couldn’t be used. ‘CASH ONLY” signs were stuck to the petrol pumps. It was a looonnnnnggg way to the next petrol station. Although I use my credit card mainly, I do have enough cash for emergences for situations like that, and I was able to fill my car and drive on. Anyone without cash would have needed to wait for the phone line to be fixed. (For those, camping was available :D)

russianafroman russianafroman 12:41 pm 27 Jun 21

Cash is objectively better and I can see why certain bankers want it to be “phased out” under the guise of “Covid”. A good rule is if your transaction requires a pin you should be using cash

    salvatge salvatge 9:25 pm 27 Jun 21

    Definitely, objectively better. Cash is so much more convenient, I can carry around as much as I want without fear of being mugged, it doesn’t take up space, I can use it on the internet, I can use all the check out aisles at the supermarket… Objectively.

Guy Noble Guy Noble 12:37 pm 27 Jun 21

Wont use anything but cash,,,,,, banks make enough money

Jody Maree Harrison Jody Maree Harrison 10:06 am 27 Jun 21

Cash has always been a germ magnet anyways so is touching a eftpos terminal.

Keep washing your hands

Matt Mison Matt Mison 9:19 am 27 Jun 21

Don’t carry cash, haven’t for a couple of years. Cash only is a deal breaker!

Stephen Page-Murray Stephen Page-Murray 8:08 am 27 Jun 21

It cash or nothing from me…

Shane Richards Shane Richards 3:19 am 27 Jun 21

If you don't take cash I won't shop there...

    Luke Reeves Luke Reeves 10:49 pm 27 Jun 21

    Shane Richards that's a good way to encourage and support tax evasion.

    If they don't have EFTPOS, they're dodging the system.

Daniel Duncan Daniel Duncan 1:09 am 27 Jun 21

I prefer cash. No transaction fees and the banks can't sell your transactions to data brokers.

Jose Vega Jose Vega 11:18 pm 26 Jun 21

Black Market economy needs cash...

Brian Harris Brian Harris 9:51 pm 26 Jun 21

Cash is always welcome at Songland 😎🐸

Nick Savino Nick Savino 9:18 pm 26 Jun 21

That’s great cash is king

Lisa LaMaitre Lisa LaMaitre 9:13 pm 26 Jun 21

Good news!

John Brinsmead John Brinsmead 8:59 pm 26 Jun 21

Alot of tradies I use give discounts for cash payments.

    Julie Macklin Julie Macklin 6:06 pm 27 Jun 21

    John Brinsmead The ones I have dealt with used bank transfer.

Samuel Gordon-Stewart Samuel Gordon-Stewart 8:28 pm 26 Jun 21

I pay for as much as possible with cash, and generally don’t go back if a place stops taking cash unless there is no choice (hello Access Canberra shopfronts).

Why? Three reasons mainly.

1. I find it easier to control discretionary spending when I physically have to hand over cash rather than hear a painless beep.

2. When the bank systems go down, as they frequently do, I can still buy stuff. I got to the front of the post office queue very quickly when EFTPOS went down and nobody else had cash a week or so back!

3. It reduces a bit of the widespread tracking of my spending. For example, think about the current Commonwealth Bank advertising campaign where they offer demographic insights in to your store’s customers based on the card transactions in your store. Think about the amount of demographic data which has to be shared between financial institutions and processed and modelled goodness-knows-what-else in order to present that sort of data.

Privacy might be a myth in this day and age, but that doesn’t mean you have to offer up every aspect of your life for tracking and analysis.

    Nada Krstin Nada Krstin 10:21 pm 26 Jun 21

    Samuel Gordon-Stewart hallelujah, finally someone with some sense! Spot on.

    Have spent countess replies trying to justify to fools why I want to continue to have the choice of both options rather than go cashless.

    Often their logic is cash means ‘money laundering & tax avoidance’ - lol -as explained to them, all my earnings are declared and submitted via tax return. I then make an ATM cash withdrawal against my wages to have tangible cash on hand to spend as I like – nothing dodgy here!

    But your point #3 is also the one that most resonates with me (Big Brother is watching) – I don’t need or want to have every coffee, meal and every part of my life etc tracked 24/7

    Nancy Poundstone Opdyke Nancy Poundstone Opdyke 2:19 pm 28 Jun 21

    yes, number 3!

Gabriel Spacca Gabriel Spacca 8:28 pm 26 Jun 21

It’s probably from the vast number of people who think that Bitcoin means part of a coin.

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