to - day transactions, there is still strong demand for banknotes as a store of wealth, with 38 $ 50 banknotes and 18 $ 100 banknotes on issue for every australian ( graph 4 ). graph 3 value of cash withdrawals monthly, seasonally adjusted * $ b $ b atm ( lhs ) 2. 4 1. 8 1. 2 debit card cash outs ( rhs ) 0. 6 * series break between february 2018 and may 2018 due to changes in collection and reporting methodology. source : rba graph 4 banknotes in circulation per capita * no. no. $ 5 $ 10 $ 20 $ 50 $ 100 * calculated using march 2022 population figures and banknotes in circulation as at end - november 2022. sources : abs ; rba while it is pleasing to see merchant payment costs trend lower, three developments are working in the other direction. the first is the shift to higher - cost international scheme debit cards and away from eftpos ; on average, the international debit schemes cost merchants over 20 basis points more to accept than eftpos. the second is the shift to online commerce, where merchants typically face higher payment costs. and the third is the greater use of mobile wallets offered by apple pay, google pay and samsung pay. use of these wallets is growing very quickly and they are often more expensive for merchants to accept ( graph 5 ). graph 5 mobile wallet transactions share of card transactions % % total debit credit m j s d m j s d m j source : rba i would also like to highlight the fact that there are large differences in the payments costs incurred by small and large businesses ( graph 6 ). small businesses, on average, pay twice what large businesses pay to process the same transaction. while economies of scale explain some of this difference, they are not the full story. r e s e r v e b a n k o f au s t r a l i a graph 6 cost of acceptance by merchant size * per cent of value of card transactions, 2020 / 21 % % 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 < $ 100k $ 100k – $ 1m $ 1m – $ 10m > $ 10m 0. 0 merchant size * weighted average. merchant size based on annual value of eftpos, mastercard and visa transactions. source : rba given these various developments, the

the economy for both households and businesses. graph 3 money market rates % % bbsw 0. 75 0. 75 0. 50 0. 50 0. 25 0. 25 cash rate expected cash rate 0. 00 m j s d m j s d 0. 00 sources : bloomberg ; rba the final monetary policy driver of borrowing rates in the economy is the 3 - year bond yield target. the bank has chosen to focus on the 3 - year bond yield target for a couple of reasons. it influences many borrowing rates across the economy, given that borrowing rates in australia are variable or fixed for short horizons, compared with other countries such as the us, where the 10 - year government bond rate is a more important pricing benchmark. secondly, the 3 - year horizon is aligned with the forward guidance on the cash rate. the board has stated that it will not increase the cash rate until actual inflation is sustainably within the target range of 2 – 3 per cent. given the outlook for the labour market and the economy, the board does not expect to increase the cash rate for at least 3 years. the combination of ample system liquidity, the low cash rate and es rate, the 3 - year yield target and the expectation that policy rates will remain low for at least 3 years are underpinning low borrowing https : / / www. rba. gov. au / speeches / 2020 / sp - dg - 2020 - 11 - 24. html 6 / 14 11 / 24 / 2020 monetary policy in 2020 | speeches | rba rates across the economy. how has this being passed through to borrowing rates for businesses and households? there was a step down in business borrowing rates following the policy package in march ( graph 4 ). they have declined further since. corporate bond yields have declined as credit spreads have reverted to pre - pandemic levels and the risk - free benchmark curve has declined. there has been subdued bond issuance by banks because of the significant increase in funding from deposits and the tff. this has contributed to a further compression of corporate spreads as fixed income investors look for other bonds to buy. graph 4 business – variable lending rates * average interest rate on credit outstanding % % small business medium business large business j a s o n d j f m a m j j a s o * data cover financial institutions with $ 2 billion or more in business credit sources : apra ; rba after the surge in drawdowns of credit lines in march and april