Australia is still a cash based society

Despite the growing trends to use plastic credit and debit cards, Australia remains to be a cash-based society. The dominant position of cash has been found by Reserve Bank of Australia in the study of consumer payment behavior which reports the use of cash for 70% of all transactions. The use of cash to make the low value payments under $10 and 75% of payments for goods worth between $11 and $25 give such a dominant position to cash.

The transactions made with the use of debit cards as EFTPOS, MasterCard, and Visa account for 15% of all transactions while cheques and BPAY account for 29% of higher-value consumer payments above $500.

The RBA's study indicated dramatic changes in payments in Australia over the past 10 years while revealing the tendency to use credit cards more often as the result of participation in loyalty or reward programs and the availability of interest-free periods. The rapid growth in the use of credit cards observed in the second half of the 1990s has been due to the introduction of loyalty programs. 

The research found that interest-free periods encouraged the use of credit cards while loyalty programs induced substitution to credit cards from cash. Loyalty programs affect customers in a way that they will increase the use of credit card by 23% and reduce using cash for 14%. 

In addition to loyalty and reward programs, interest-free periods make credit cards attractive to consumers as well.