For decades, we have been talking about this utopian vision of a cashless society.

Now, it has suddenly appeared almost by stealth.

At least, that is the case in Australia, where cash is becoming an increasingly endangered species.

Around one on four Australians have stopped carrying cash on them at all, while 10 percent don’t even carry a wallet anymore.

Just 13 percent of transactions are in cash and that is expected to drop to two percent by 2025.

Now it is a different story in the rest of the world.

Americans still love their green, for example.

But even here, card and contactless payments are on the rise and cash is in decline.

As is so often the case, what we see in Australia today is likely to happen in the rest of the western world over the next five to ten years – so it’s worth taking note.

New risks from cashless transactions

People tend to think that carrying cash is risky in as much as if it is lost or stolen, it is unlikely to be recovered.

This is true, and we can all sympathize and fear for those eccentric elderly people we have all heard of who walk around carrying thousands in their pockets.

They are a special case, but the thing with cash is that most people who carry it don’t carry much.

With ATMs on every corner there is simply no need to keep more than $50 or so in your wallet in most circumstances.

That means that if something does happen to your money clip or wallet, the loss is usually minimal.

The problem is that criminal elements are going cashless just like everybody else, and if a thief, pickpocket or online scammer gets access to your card or bank details, the consequences could be significant.

Ellis Connolly is Head of Payment Policy at Australia’s Reserve Bank. Last month, he told The Australian Financial Review Banking Summit: “Australians are relying on electronic payments more than ever, so our retail payment systems must be safe and resilient.”

Tap and go the most popular payment method

Australians are the top users of card payments in the world, ahead of China, South Korea, the UK and the US. Most transactions are now “tap and go,” with methods that involve verification by PIN or signature declining almost as fast as cash transactions.

The risk here is that if users are not vigilant a payment card can rack up a lot of purchases in the wrong hands.

There have also been reported instances of criminals using card skimming devices to steal data and create cloned cards.

However, while contactless card payments are peaking in popularity right now, their moment in the sun could be a short one.

Digital payments are on the increase

Apps like Google Pay or Apple Wallet allow you to make payments directly from your phone, using information from your bank card.

This method of payment is rapidly increasing in Australia to the extent that it is expected to overtake card payments within the next 12 months.

Already, one in ten Australians say they don’t habitually carry a wallet or purse, simply relying on their smartphone.

It is a perfect example of why smartphones are so convenient. Already, they have rendered cameras, maps, music players and public phones obsolete.

Now they are even replacing money and payment cards.

Of course there are risks here, too.

One glaring issue is that a dead battery or lack of internet access could leave you stranded.

But secondly, it is more important than ever to ensure phones are properly secure and that password or biometric protections are in place.

Casinos represent a strange anomaly in the cashless world

There is one industry that is lagging behind in the move towards a cashless Australia.

This is a nation that gambles more per capita than any other, yet despite the rest of the nation rapidly leaving cash behind, Australia’s gambling houses are struggling to leave the 20th century.

Casinos will take card payments for gambling chips, but if you are lucky enough to win, cashing out still means just that.

It seems anomalous in the 2020s to see a lucky winner self-consciously distribute bank notes between different pockets before heading nervously away from the cashier desk and out into the night.

This is surely one of the reasons so many Australian gamblers are choosing online debit card casinos, where deposits can be made and winnings withdrawn straight onto a debit card.

Given the speed with which the rest of Australia’s business sectors are forsaking cash, it is surely only a matter of time before its casinos do likewise and at least follow the example of their online brethren in joining the debit card age.