The Reserve Bank of Australia says cash will become a "niche" payment and cheques will be phased out as consumers accelerate their take up of digital transactions.

Declaring the transition to be in the national interest, the central bank's governor Philip Lowe laid out the clearest map yet of the RBA's intentions on Monday, as contactless payments soar to up to 60 per cent of all electronic transactions.

"For some decades, people have been speculating that we might one day go cashless – that we would no longer be using banknotes for regular payments and that almost all payments would be electronic," he said.

RBA Governor Philip Lowe Credit:Fairfax Media

"So far, this speculation has been exactly that – speculation. But it looks like a turning point has been reached. It is now easier than it has been to conceive of a world in which banknotes are used for relatively few payments; that cash becomes a niche payment instrument."