How far are we from a cashless economy?

“I’ve been to 30 countries this year without any cash. I’ve never had to use it.”

Airwallex, which was last valued at $5.5 billion by the end of 2022, rejected a $1 billion takeover offer from Stripe in 2018, which Mr. Zhang now says was not about money. Mr. Collison declined to comment.

Statistics from Australia’s largest bank, Commonwealth Bank, back up Stripe and Airwallex’s claims: Its customers are now withdrawing 51% less cash from ATMs than in 2019, while digital payments are up 85% from five years ago.

Australians spent $126 billion using mobile wallets last year, surpassing total ATM cash withdrawals for the first time.

“While the vast majority of payments in Australia are now made by card and digitally, many people still want access to cash. Cash is, and will continue to be, a vital part of the economy,” Angus Sullivan, the bank’s group executive for retail banking, told the newspaper.

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“We spend around $400 million a year to support cash distribution across Australia and we are committed to ensuring customers who need cash have access to it.”

There are concerns that vulnerable groups will be worst affected by a move away from notes and coins, with lobby group CashWelcome.org arguing that banks’ moves to restrict access to cash could leave millions of vulnerable people struggling.

However, Collison said India and China were great examples of nearly cashless economies that had managed to take care of the most vulnerable in the process.

Cash is also becoming increasingly expensive to transport and distribute: cash transport company Armaguard received a $50m bailout in June from the major banks, retail giants and Australia Post after warning that its future was at risk.

Another serious concern is resilience. Over-reliance on technology for payments puts businesses and consumers at risk in the event of a large-scale disruption, such as the recent CrowdStrike Events It paralyzed supermarkets and businesses around the world. Some estimates put the loss of power outages in Australia alone at more than $1 billion.

“For businesses operating at scale, reliability is fundamentally important,” Collison said.

“We put a lot of energy and attention into this, making sure we have geographically redundant data centers so that an earthquake in one place doesn’t interrupt processing.

“We just approved an unnecessary and significant expenditure this year to further improve our reliability. This will make our financial position look slightly worse in 2024, but we believe it is the right thing to do given the position we are in.

“These infrastructure platforms have to operate with that attitude.”

Over the past decade, Australia has built a strong foundation in fintech and payments innovation, with the birth of Airwallex and similarly heavyweights Afterpay and Zip.

For Collison, Australia is doing well in fintech, just as it did in the Paris Olympics.

“If you look at it from a per capita perspective, I think the US is punching below its weight, while other countries are punching above their weight, and Australia is a good example of that,” Collison said.

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“Australians are smart, sophisticated, well-educated and digitally savvy. Perhaps because of the distance, the country has had to adapt quickly and take advantage of technologies like the internet and e-commerce. It’s clear that people here are naturally entrepreneurial, I mean Atlassian and Canva are two of the most successful software companies in the world and they were both founded here.”

Patrick Collison founded Stripe in 2010 with his brother John, and the two moved from Ireland to California to raise venture capital funding for their startup, which has dual headquarters in San Francisco and Dublin. In 2016, they became the world’s youngest self-made billionaires.

Patrick said he would not hesitate to recommend anyone to start a business with his brother.

“There’s this idea that you shouldn’t work with your friends. I think that’s a conspiracy to deprive people of some of the most fulfilling experiences in their lives,” he said.

“I think it’s a great thing to work with friends and family.”

I was at the Stripe Tour as a guest of Stripe.

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