A few months ago Aussies were rushing to withdraw cash from ASX banks like crazy.
In the second half of March 2020 people were withdrawing large amounts of cash, sometimes millions of dollars at a time. COVID-19 was causing investors and the general public to freak out.
It was reported that banks, such as Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) had to use more security vans to deliver funds to branches so that people could withdraw cash.
What’s the situation now with Australians withdrawing cash?
The Reserve Bank of Australia (RBA) releases a monthly update about the total value of ATM cash withdrawals in the country.
According to the stats, ATM cash withdrawals dropped from $9.24 billion in March 2020 to $6.41 billion in April 2020. A drop of just over 30%.
I think the fall can probably attributed to several different things. Some people had already withdrawn the cash they needed. People just weren’t spending as much money in April. Aussies were being encouraged to use their card to pay for things rather than cash, particularly with the contactless function.
Paying by card is usually more convenient for consumers. Physical cash is fairly easy to lose. I’d much rather have cash in the bank earning (a little bit of) interest rather than have physical cash these days.
Tyro Payments Ltd (ASX: TYR) is one of the ASX businesses trying to help change the retail environment to become more digital.
It’s clear that Australian confidence is returning. Time will tell whether that confidence is well placed.
Since 23 March 2020 the CBA share price has risen by 33%, the Westpac share price has gone up by 41%, the ANZ share price has jumped 49% and the NAB share price has risen by 47.5%. ASX banks could rise even further from here. They’re still down significantly from their previous prices. But I think there could be even better opportunities out there.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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