Staff at a new Commonwealth Bank branch have told a Daily Mail Australia reporter that she could not withdraw cash inside, as the big banks continue to limit access to physical money.
National Australia Bank has joined ANZ and the Commonwealth in the trend of opening ‘cashless’ branches, and interviews with members of the public show most people are concerned about the restrictions on being able to access their own money on their own terms.
Daily Mail Australia visited one of Commonwealth Bank’s Specialist Centres at Barangaroo in Sydney on Wednesday only to be told to go elsewhere.
‘So there’s no cash here?’ our reporter asked.
‘That’s right, we are a Specialist Centre. We do have an ATM,’ the CommBank employee replies.
‘Is it a bank or not?’
‘It is a bank but it’s a Specialist Centre bank! The closest branch that you can withdraw money from is a five to 10 minute walk up that way on George St.’
Daily Mail Australia visited one of Commonwealth Bank’s Specialist Centres at Barangaroo in Sydney on Wednesday only to be told to go elsewhere for cash
The shift to digital transactions has sparked many concerns, including the impact on older Australians who are not familiar with online banking, and regional communities who may have to wait days for any malfunctioning payment systems to be fixed.
The cashless society also means people have no choice but to be a bank customer and pay them fees, as well as raising privacy concerns in a society where every purchase of any good or service can and will be tracked.
Customers also become at the mercy of technical problems, unable to pay for anything during periods when their bank suffers any technical problems.
”Its crazy. Its our money, and we still need to, and want to be able to, use cash,’ one frustrated bank customer told Daily Mail Australia when interviewed on the street.
‘What right does a bank have to say we can only transact the way they want us to transact?
‘Its all about fees. They want everyone using EFTPOS so they can skim off that little fee which goes to their billions of profit every year.’
Another man said he saw the logic behind it from a banking and government point of view, as it would effectively kill off the cash-payment black economy.
‘I can see why it’s happening,’ he said. ‘In a cashless society, you can track where people are spending their money, so we can’t evade taxes.’
Commonwealth Bank has opened Specialist Branches which do not offer over-the-counter withdrawals and deposits
NAB’s similar new Expert Centres offer ‘more space for appointments and digital banking support’ by replacing face-to-face teller transactions with SmartATMs located on-site.
The NAB Expert Centres reserve their in-person customer service for loan products, new accounts, business banking and teaching customers how to bank digitally.
Similar to CommBank’s Specialist Centres, they are in Sydney, Melbourne and Brisbane locations close to ‘traditional branches’.
But the wider shift towards self-service for ‘everyday banking’ isn’t only confined to metro areas with an alarming number of regional branches – where banks were once a pillar of the local community – going cashless or closing entirely.
NAB has also gone cashless at two locations in Geelong, Victoria and one at Broadbeach on Queensland’s Gold Coast.
The shift to electronic payments also means more fees can be heaped on customers, especially when using independent ATMs.
Many Australians are even deliberately choosing to pay in cash, because whenever bank cards are used, some of the money will invariably be eaten away by fees, which shop owners are forced to pay.
Queensland mum Fiona Edmunds recently explained physical money will retain it’s value no matter how many times it is used.
‘But if I come to a restaurant and pay digitally via card, the bank fees for my payment charged to the seller could be up to 3 per cent or $1.50.’
Ms Edmunds said a similar percentage is imposed on every other transaction using that original $50 if the holder pays via tap-and-go.
Pictured are workers at a cashless Commonwealth Bank branch in Penrith where deposits and withdrawals can still be made via on-site ATMs
‘Payments made by the laundry shop owner, the barber and so on. Therefore after 30 transactions the initial $50 will exist at only $5 and the remaining $45 has become property of the bank.’
Editor at large of Canstar, Australia’s largest financial site, Effie Zahos said in May that she felt for consumers as well as small business owners.
Ms Zahos said Eftpos fees sit around $0.34, Mastercard fees are about $0.47, while Amex is ‘a lot more expensive’ with a $1.34 surcharge.
She added the fees themselves had not increased but instead were influenced by the cost of living.
‘We are seeing inflation number still at that 7 per cent, so the value of what we buy has gone up,’ Ms Zahos said.
‘So guess what? The fee we pay on that card goes up as it’s calculated as a percentage.’
Ms Zahos said while big businesses generally absorb the merchant fee the majority of small businesses will pass the fee onto their customers by increasing product costs.
While a simplified example and fees vary wildly between banks, the principal is sound.
The remaining ‘big four’ bank, Westpac, is taking a different tack to streamline their business by combining their branches with those of brands it owns such as St George, BankSA and Bank of Melbourne.
The ‘co-location’ strategy rolled out mid-2022 is seeking to merge 100 bank branches by the end of this year, many in regional locations.
Bega and Dubbo in country NSW, Alice Springs and Darwin in the Northern Territory and Port Pirie in South Australia are just some of the locations where Westpac has merged branches.
Smaller banks outside the big four are also being affected by the upheaval as banks reassess the profitability of their brick-and-mortar branches amid a surge in customers managing their accounts online.
Bendigo Bank Community Bank Branch in Doreen & Merinda, in Melbourne’s outer north, in 2021 made the decision to ‘transition to a cashless site’.
‘We plan to provide the services that the community are using and benefiting from, whilst removing those costly services where demand is diminishing, expected to decline or is no longer required,’ the bank said in a letter to shareholders.
‘These operational changes are intended to help stabilise our current financial situation, with a longer-term view of trying to achieve profitability.’
‘The transition to a cashless branch is a change now adopted by several others in the Bendigo Bank network.’
‘The repurposing of the branch will require some internal modification and a new layout will provide the full range of banking services expected by our customers including the appointment of a full-time mobile banker.’
Dutch owned Rabobank, which has has more than 50 locations across the country which are largely regional and focused on agri-business customers, doesn’t offer over-the-counter cash transactions.
It directs customers wanting to deal in cash to visit Bank@Post outlets at Australia Post offices.
According to the Financial Services Union between June 2017 and June 2022 over 1600 bank branches were closed across Australia.
‘A disproportionate number of these branches located in regional Australia… Furthermore, it appears that without intervention this trend is set to continue, leaving more regional communities in its wake,’ the FSU said.
The federal government Rural and Regional Affairs and Transport References Committee on February 8 this year initiated an inquiry into regional bank closures.
The inquiry will examine regional bank closures, their impacts, and possible solutions with a report due by December 1, 2023.
The actual shrinking of physical bank services across the country may be even more dramatic than the figures show.
News website The Regional in 2021 found inconsistencies among hundreds of bank locations being classified as branches that did not offer face-to-face cash services.
A bank location needs to offer in-person cash transaction services to be classified as a ‘branch’ for reporting purposes to the Australian Prudential Regulation Authority, which collects data on bank ‘points of presence’.
Under the Financial Services (Collection of Data) Act 2001, self-service ATMs are classified as a different service channel.
An APRA spokesperson told the publication some locations had been classed as branches but only offered self-service ATMs to those doing ‘everyday’ banking.
Daily Mail Australia interviewed some Sydneysiders who had were undecided about how the change would affect them
‘In cases where branches were staffed and offered customers the ability to withdraw or deposit cash using ATMs, APRA considered that those facilities continued to meet its definition of a branch,’ an APRA spokesman said.
Treasurer Jim Chalmers has since said those locations which have withdrawn teller service and forced customers to use ATMs do not meet the legal definition of branches.
APRA has since largely corrected their classification data since The Regional’s report.
Managing director of payments consulting firm The Initiatives Group Lance Blockley said there would likely be more bank closures.
‘There’s probably still a place for branches, but they may be smaller format, and you can already see that in some of them. There will be less of them, and you will have more mobile bankers,’ Mr Blockley told The Sydney Morning Herald earlier this year.
ANZ CEO Shayne Elliott recently told a parliamentary hearing customers simply don’t use branches.
‘What we’ve found is… a lot of people bemoan the fact that branches are closing but they don’t actually use them,’ he told the House of Representatives economics committee in Canberra this month.
‘And even when we do provide alternative solutions, the usage is extraordinarily low because people actually do like the convenience of being able to do things digitally.’
‘Only eight per cent of our customers only use a branch and don’t have any sort of digital relationship with us,’ he said.
‘That is falling at a rapid rate.
‘Most of them are actually more likely to be small business operators, small businesses have more complex needs than individuals.
‘Retail customers are generally pretty well serviced on a digital basis.’
