The increase in tap-and-go and online shopping by consumers to avoid COVID-19 will push the Reserve Bank to print more notes and passports for overseas markets as domestic demand for cash wanes.
The RBA said on Tuesday there had been a “significant shift” by merchants towards contactless payment systems and away from cash due to the pandemic, with a flow-on effect to its note printing business.
Over the 12 months to the end of July, the value of $5, $10, and $20 notes in circulation fell while there was just a 0.1 per cent lift in Australia’s most common banknote, the $50.
This followed a sharp increase across all notes in the preceding 12 months as demand soared in the early stages of the pandemic. Demand for the rarely seen $100 note jumped by 14 per cent over the period and has climbed another 5 per cent since the middle of last year.
The $100 note is most commonly used as a store of value rather than being used for everyday purchases.
But in its five-year corporate plan, the Reserve Bank said its printing business, Note Printing Australia (NPA), would likely increase its work for overseas customers as local demand is unlikely to lift.
“With less capacity needed to meet ongoing production demands for the new series of Australian banknotes, NPA’s corporate strategy also involves undertaking more export work to sustain the viability of the print works and keep the cost of Australian banknotes at reasonable levels,” it revealed.
Last financial year, on top of the 331 million Australian notes it delivered to the Reserve Bank, Note Printing Australia also supplied 149 million notes to Papua New Guinea, Singapore, Brunei and Malaysia.
It produced 1.9 million passports for the Foreign Affairs Department.