Experts, pundits, punters and even cartoonists have seized on last week’s massive CrowdStike tech outage to argue it shows the dangers of getting rid of physical money = but some experts still say a functionally cashless society is inevitable.
Banks, businesses, airlines, broadcasters and government agencies were thrown into chaos when a faulty software security patch issued by US-based company CrowdStrike crashed Microsoft operating systems in Australia and worldwide.
Denied the option of digital payments, supermarkets along with retail and hospitality businesses were forced to accept cash only, while the ‘blue screens of death’ even forced some outlets to close on July 19.
Swinburne University electronic payments systems Professor Steve Worthington told 7News the outage highlighted the need for cash to remain a back-up option despite its use dwindling.
‘Cash can’t crash,’ he said.
‘I don’t think it’s still king but it’s in the royal family of payments, if you like.
‘The global outage reminds us of the fragile nature of the modern IT world and it’s interconnectivity. Someone’s pulled one brick out of the wall and the wall’s just collapsed.
‘The cashless society is a bit of mirage, really. It always appears to be on the horizon but you walk towards it and it’s disappeared again.’
Last week a worldwide tech outage threw Australia’s banking, retail, travel, broadcasting, hospitality and government sectors into turmoil
Sky News commentator Caleb Bond argued in an opinion piece that ‘if you ever you needed an argument against a cashless society, you saw it last week’.
‘There would be no faster way, these days, to cripple a society than cutting off its internet and banking systems,’ he wrote.
Bond said a malign hack or another outage ‘could bring a country – or even the entire world – to complete submission’.
Those who have ‘total control of the flow of money through electronic means you have total control of the world’, he stated.
‘Our governments and banks know this,’ he wrote.
‘That’s why they like the idea of a cashless society.
‘But foreign powers and criminals also like the idea because it makes it much easier to wage war.’
He argued that in these circumstances ‘to usher in a cashless society would be to sign our own death warrant’.
The theme of cash being a means of control was also picked up by the weekly ‘Please Explain’ cartoon put out by One Nation as satirical commentary and advocacy.
In Friday’s episode of the cartoon Anthony Albanese wanted to buy a snag from a Bunning’s sausage sizzle but was told he can only do so with a card and that incurs an extra fee.
Momentarily determined to stop this outrage Mr Albanese – like Jack climbing the beanstalk in the fairy tale – entered the huge castle-like ‘lair’ of the four big banks, which are depicted as literal giants wearing banking attire.
The oversized figure representing the Commonwealth Bank picked up the prime minister to give him a seat ‘right here in the palm of my hand’.
One Nation’s weekly cartoon also focused on the dangers and political temptations of a cashless society
Mr Albanese remained determined to stop the drift towards a cashless society until the giants told him it is really about power.
‘Going cashless gives up total control,’ said the figure representing the ANZ.
‘No economic privacy, we can see and stop any transaction,’ the NAB goliath said.
‘He who controls the money controls the world and that he could be you,’ the Commonwealth behemoth said to an increasingly convinced Mr Albanese.
Mr Albanese returned to Bunnings and says he is happy to pay for a sausage with his card, even if meant a surcharge, but then the CrowdStrike outage hits.
Sky News pundit Caleb Bond argued that the CrowdStrike outage shows going cashless would be like ‘signing a death warrant’
‘Why didn’t we keep cash as a redundancy measure?’ asked one of the panicking people in the queue.
Following the CrowdStrike outage many on social media also used it to point to the need to keep cash.
On the ‘Cash is King’ Facebook page, one user posted an image of supermarket automatic registers closed and displaying the ‘blue screen of death’.
‘So when it suits them cash is OK,’ the user commented with shrug and laugh emojis.
‘Well I’ll be damned… once again, it is proven Cash is King,’ another user replied.
‘Just got home from work… My wife is already asking for cash, it’s been a long time since I remember her having to ask me,’ another stated.
‘What a joke and they want to get rid of cash,’ was a further reply.
Swinburne University Professor Steve Worthington said the outage showed that while cash might necessarily still be ‘king’ it remained in the ‘royal family’ of payments
RMIT University finance academic Angel Zhong still expects Australia to go ‘functionally cashless’
‘All who had cash today are laughing as the banking system went down,’ read another post.
‘Won’t the banks and government hate this, they’re banging their heads against a wall cos it shows we are right,’ another said.
Reserve Bank of Australia Governor Michele Bullock warned in December that the declining circulation of cash was putting pressure on the economics of ATMs and physically moving notes and coins around.
She even suggested businesses could start to push those costs onto consumers by charging extra to use cash.
RMIT University finance academic Angel Zhong has previously suggested Australia will become a functionally cashless society by 2030, earlier than the Commonwealth Bank’s forecast of 2026.
Functionally cashless, she explains, means digital payments make up more than 90 per cent of total payments, although cash would retain its value and not disappear.
Her calculation is based on consumer preference data from the RBA.
The latest 2022 survey, published in June 2023, shows cash made up 13 per cent of total payments, down from 69 per cent in 2007 and 27 per cent in 2019.
Dr Zhong said the CrowdStrike outage, which was hot on the heels of the 2023 Optus outage, didn’t change her forecast but highlighted digital vulnerabilities.
‘These outages and incidents, that is why we’re not transitioning overnight,’ she says.
‘We are not ready to be a 100 per cent cashless society. This will shake consumers’ confidence in digital payments.’
Dr Zhong urged financial institutions to use the latest outage as an opportunity to shift from reactive to proactive risk management by enhancing systems resilience.