Tourists think cash is flash, but plastic’s fantastic

12 Aug 2019


  • Australian Economy

Diala Raad, Principal Analyst, Tourism Research Australia


How did you pay for your last purchase? A method other than cash? With the benefits of cashless transactions ranging from convenience to increased theft protection, it is easy to see why they are gaining popularity across the globe.

According to the World Payments Report 2018, non-cash transaction volumes grew by 10.1 per cent in 2016. Of all the non-cash payment instruments, debit card transactions grew the fastest by 14.7 per cent. This was followed by credit cards at 10.9 per cent.

But our tourists have been slow to catch up. Among Australia’s international tourists, cash was still the most common transaction method. In the year ending March 2019, Tourism Research Australia’s data showed that 82 per cent of tourists used cash payments for at least some transactions during their visit, and 22 per cent used cash for their entire trip.

Business travellers use cards over cash

Interestingly, payment methods were divided amongst tourist types. International visitors travelling for employment (91%) and business (86%) had higher rates of card usage. Not surprisingly, thirty five per cent of business visitors used card-only transactions exclusively, presumably because it’s easier to track expenses on card.

In contrast, leisure visitors were more likely to use cash for their transactions, with 88 per cent of holiday visitors and 81 per cent visiting friends and relatives using cash during their trip.
Education visitors had some of the highest rates of both card (94%) and cash (83%) usage. This can be explained by them having stayed more nights in Australia on average (129 compared to 32 days for everyone else).

Payment preferences vary between countries

Among Australia’s tourists, travellers from European markets and the US had the highest rates of card usage. Scandinavian’s scored highest with 94 per cent of travellers using cards. This was influenced by Sweden’s move to become the world’s first cashless society by 2023. This is a trend throughout the Scandinavian countries whereby cash is already no longer accepted in many establishments.


Conversely, Asian visitors were more likely to use cash during their trip (86%), and cash only during their visit (27%) than visitors from other markets, particularly visitors from Indonesia (42%), Malaysia (39%) and India (38%).


Unsurprisingly, older people prefer cash

Use of cards tended to decrease with age, with people below 55 more likely to use cards (80%) than those aged 55 and over (64%). This disparity was most prominent among Asian tourists with only half of those over age 55 using cards for their transactions.

However, the World Payments Report results suggest cashless transactions are gaining popularity among the Asian market. Emerging Asia was found to be the chief driver of growth in non-cash transactions globally, contributing to one-quarter (25.2%) of world growth, driven by the adoption of mobile payments and financial inclusion efforts.

The Strategic Action Plan for ASEAN financial integration 2025 will trigger strategies to promote digital financial inclusion and increase financial education and literacy, which means we will likely see this trend continue.

Our cashless future

Non-cash payments are forecast to grow at 12.7 per cent per year in the next three years, so we expect to see more cashless transactions from our tourists.

What’s more, given three of Australia’s big four banks are now using Apple Pay, we are likely to see transactions moving from cards to include phones, watches and other tech devices as well.