Auckland is one of nine cities to be dubbed “digital leaders” in a global study on realising the benefits of digital payments paid for by Visa.

The Cashless City report makes a plea to governments around the world to drive their cities towards a cashless future, which Visa says would drive efficiencies, boost economies, and reduce tax avoidance.

In the study of 100 cities around the world, Auckland is included in the top nine alongside of London,Stockholm, Copenhagen and Helsinki, Canada’s Ottawa and Toronto, as well as Sydney and Canberra.

The report claims cashlessness will lead to big economic efficiency gains and higher tax revenues, as well as cutting millions of hours from time spent in paying bill, or withdrawing cash from banks and ATMs.

But some of the calls are controversial, including one to pass laws to limit cash transactions, remove high-value banknotes, and making it impossible to pay any government agency in cash.

Visa’s Marty Kerr said New Zealand was a world-leader having been an early adoptor of electronic payment cards, though payments have been migrating onto mobile phones.

He supporteda “sinking lid” on cash issued in the economy, which would progressively reduce cash use by limiting its availability.

Many people wouldn’t even notice, he said.

“I’m effectively cashless, and most of the time I’m basically walletless as well,” Kerr said.

That was because he made his payments through his mobile, and he expected New Zealand to one day go cashless, though he was not sure when.

“New Zealand’s got pretty low ratio of cash to GDP relative to other countries,” he said.

Across the 100 cities, the Visa study estimated that going cashless “could result in direct net benefits of US$470 billion (NZ$676b)”, though only a tiny share of that would go to Auckland, which is among the smaller cities in terms of population, and already a leader in digital payments.

Like Auckland, cities are becoming home to an increasingly greater proportion of countries’ populations. By 2050, it is forecast that two-thirds of all humans will live in cities, compared to just over half today.

The study also estimated the average consumer in one of those 100 cities spends 6.4 hours a year getting money out of ATMs, 7.3 hours in banks and bank queues, and 12 hours a year paying bills in person.

Visa has an economic interest in cash becoming defunct, as have governments, but not everybody is convinced it’s a good idea.

Around the world the “war on cash,” as it has been termed, has been causing a rising tide of concern among those suspicious of governments.

Framed as a battle against tax avoidance, terrorism and economic inefficiency, critics say countries are being pushed towards cashless societies.

Ross Scholes, blogger on, says the drive is part of a bigger agenda, which includes human control.

“I would say, and it’s my personal point of view, that every country is like a farm, and we are the livestock.”

Knowing where your livestock is, and controlling its behaviour, are both things farmers are keen on.

“They are going to go cashless. There’s no doubt about it, as soon as they can get people to accept it, they will do it,” Scholes says.

New Zealand gold bullion investment website Gold Survival Guide has been tracking the “war on cash”, suggesting people liking privacy, and the ability to protect wealth from bank collapses might consider investing in physical gold or silver.

It lists the “Real Reasons For Going Cashless” as including raising more tax, tracking the populace, and leaving people unable to withdraw wealth from the banking system, so should there ever be a bank collapse, their money would be available to help recapitalise it.

It would also enable “negative interest rates” on bank deposits in times of economic crisis.

Mainstream economist Mark Cox from the venerable BERL economics consultancy doubts there would be any economic downsides to going cash free.

But he does not think the Government has any business doing away with cash.

“The rough equivalent would be if the Government was to start encouraging people to send letters rather than emails. It’s none of their business.”


1. Budgeting: Taking out spending money in cash is a strategy some use to keep their frittering in check. Lower income people make more cash payments.

2. Squirrelling: A survey in 2010 by the Reserve Bank found 9 per cent of cash use was hoarding at home, made relatively cheap by low interest rates. There’s been a rise in $50 and $100 notes in circulation

3. Avoiding surcharges: Judicious use of cash use can save money.

4. Crime: The Reserve Bank survey could only identify the use for about 40 per cent of the banknotes in the hands of the public suggesting a thriving “black” economy.

5. Privacy: Cash is anonymous, which makes it ideal for those who are doing something they do not want the authorities to track. In 2013, a survey suggested 11 per cent of adults had used cannabis. They are unlikely to have used eftpos to pay for it.

6. Tax avoidance: Paying for something in cash can result in a business deciding not to run the job through the books, avoiding company tax, and enabling the purchaser to avoid GST.

7. Christmas: Cash use spikes at Christmas. Think grandparents sticking banknotes into cards for the grandchildren.

8. Pocket money: Cashless money boxes aside, cash is king with kids.

9. Smaller purchases: Contactless payments is sweeping this away, but many small payments are still made with cash.

10. Foreigners’ cash holdings: Tourists use cash for a higher proportion of their purchases than New Zealanders.


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