Here comes the cashless society

Surfwear shop manager Angela Suvalko likes to have cash handy despite the prevalence of eftpos. Picture / Dean Purcell

From coffee to cars, chewing gum to gumboots, New Zealanders are eftpos-ing everything, and rapidly moving the country toward a cashless society.

Paymark Eftpos yesterday released figures showing more than 5 billion electronic transactions have been carried out since the system was introduced in 1989.

These days an impressive - or possibly frightening - 2 million electronic transactions are carried out daily.

"There's a hell of a lot of it going on, and Kiwis just love it," says Paymark Eftpos chief executive Simon Tong.

New Zealand now has an eftpos terminal for every 50 people.

"For electronic transactions, we would be number one in the world for transactions per capita."

Consumers' Institute head David Russell credits New Zealanders' willingness to embrace new technology for the success of eftpos.

"It has taken over from cheques, it has taken over from cash.

"It is a relatively secure and convenient [means for] payment."

It also allows shoppers an opportunity to avoid going to the bank, he says, by using their eftpos card to withdraw cash from shops.

Westpac bank figures show cheque usage declining at about 6 per cent a year. About 70 million "pieces of paper" relating to cheque transactions were handled last year, down from about 100 million a few years ago, spokesman Mark Watts says.

A 2002 study - the latest official survey - put New Zealand eftpos usage at "roughly double" that of Australia, Mr Tong says.

Paymark is the country's largest eftpos network.

Operated on behalf of the four major trading banks, it processes 70 per cent of all electronic transactions.

About 70 per cent of transactions are by debit card, the rest by credit.

And there appears to be no product too small, or too big, to be paid for by eftpos.

With merchants paying "virtually nothing" for their terminals, customers will happily pull out the plastic to buy cups of coffee and other products previously paid for in small change.

The only limit on the size of an eftpos transaction is the pre-set limit programmed into an individual card by the issuing bank.

For security reasons, these limits are normally set in the low thousands, Mr Tong says.

The technology currently exists, and with a few refinements people will soon be able to use eftpos cards for mobile phone or internet purchases.

"I guess the single biggest issue we need to resolve, and we are working on it right now, is the matter of security."

Once those measure are in place - about the start of next year - the country will truly be on its way to a cashless society, he says.

But don't throw out the chequebook just yet, says Massey University banking lecturer Claire Matthews.

Many of her students have little idea what a chequebook is, and would not use one if they did.

However, businesses, and the older-generation shopper, still like to write cheques when they go spending, she says.

And cash is king with one surfwear shop manager in Auckland's Queen St.

Angela Suvalko of Billabong says she prefers to use cash rather than credit or Eftpos cards for their daily transactions.

This could be due to her upbringing in Whangarei.

"You could say I'm old-fashioned, but I'm not from Auckland and I always carry cash," she says.

There is always between $40 and $60 in her wallet for the little things.