In a move to safeguard Australians’ access to essential goods and services, the Albanese government has announced plans to mandate that businesses accept cash payments for essential items starting in 2026.
This initiative seeks to support people who rely on cash, particularly during natural disasters, digital outages, or other disruptions to electronic payment systems.
Why the cash mandate matters
The proposal aims to address growing concerns over the declining availability of cash options in Australia. With more than 6000 ATMs removed over the last five years and approximately 200 bank branches closing just last year, cash has become harder to access for many Australians. These changes disproportionately affect older Australians, those in rural and remote areas, and vulnerable groups who may not have easy access to digital payment options.
Treasurer Jim Chalmers emphasized that the move is about ensuring no Australian is left behind in an increasingly digital economy. “Cash still plays a vital role, particularly for those who face barriers to accessing or using digital payment systems,” he said.
What does the mandate cover?
The details of the mandate are still being developed, but Treasury will start consultations later this year to determine:
- What constitutes an “essential item”: Initial indications suggest this will likely include groceries, fuel, banking services, and healthcare.
- Which businesses will be required to comply: Large businesses such as supermarkets, petrol stations, and healthcare providers are expected to fall under the mandate.
- Possible exemptions for small businesses: Smaller businesses, particularly those in rural or remote areas with limited capacity to handle cash, may be excluded. Factors such as business size, proximity to population centers, and logistical challenges will be considered.
The government aims to strike a balance between supporting cash-reliant customers and ensuring businesses can realistically comply with the new rules.
How will this impact you?
- Improved access to cash payments: Customers will have the assurance that they can use cash for key purchases, even in times of digital disruption.
- Clarity on surcharges: Excessive card surcharges are already banned, but this move may push businesses to offer fairer pricing for digital and cash payments alike.
- Increased consumer choice: Businesses will no longer be able to decline cash payments for essential goods and services, giving consumers more options.
Cash vs. Digital Payments: A growing debate
The rise of digital payments has sparked significant debate. Many businesses, particularly smaller ones, have moved away from cash-only operations, citing convenience, safety, and efficiency. However, critics argue that this trend risks alienating customers who prefer or need cash payments.
Digital reliance also creates vulnerabilities. Natural disasters, power outages, or cyberattacks can disrupt digital transactions, leaving customers stranded if cash is not accepted. The government’s cash mandate aims to ensure resilience in the payment system during such crises.
What about cheques?
The cash mandate coincides with the government’s plan to phase out cheques by 2029, reflecting the sharp decline in cheque usage over the past decade. Cheques now account for just 0.2% of retail payments in Australia.
- June 30, 2028: Cheque issuance will end.
- September 30, 2029: Cheques will no longer be accepted as payment.
Banks like ANZ have already stopped issuing cheque books, while others, including Commonwealth Bank and NAB, are gradually following suit. Treasurer Chalmers has called on banks to ensure customers, especially older Australians, continue to receive support during the transition.
What’s next?
Consultations on the cash mandate are expected to begin in late 2024. The government will work with stakeholders to finalize the rules, with implementation targeted for 2026. Businesses and consumers alike are encouraged to participate in the consultations to shape a policy that benefits all Australians.
Swinburne payment systems expert Professor Steve Worthington says cash payments have been guaranteed in several countries, and hopefully Australia will follow suit by 2026. “Cash is an important option of payment for senior citizens; those who live in regional areas where internet reception is problematic and in emergencies such as fire, flood and power failures.
“Access to cash underpins our ability to use cash and here we need to ‘up our game’. Both the number of ATM’s and Bank Branches continue to decline and the ‘cash in transit’ business, dominated by Armaguard, is increasingly fragile as a business.”
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