The Australian Treasury is consulting on a plan to mandate cash acceptance for essential goods and services.
Cash payments accounted for just 13% of transactions in 2022 compared to 69% in 2007, leading some commentators to suggest that cash could be on the way out. However, the Australian Government is working to ensure that cash will remain in circulation and continue to be accepted by most businesses.
The Australian Treasury is currently considering how to best implement a mandate for cash acceptance. From December to February, the Treasury held a consultation to explore which groups were most reliant on cash, which businesses, goods and services should be covered by a mandate and how the mandate should be implemented.
Who needs cash?
Currently, there is no requirement for businesses to accept cash payments for transactions, however, Treasury data suggests that up to 94% of businesses in Australia choose to do so. The aim of the mandate is to ensure that, even if the use of cash by customers continues to decline, businesses will still maintain a policy of cash acceptance and customers who rely on cash payments will be protected.
As the Treasury’s consultation notes, cash is still essential for many people in Australia, with about 1.5 million people using cash for more than 80% of their in-person transactions. There are also many reasons why people may prefer to use cash than a card or digital payment including for financial independence, safety and security or ease of budgeting. In a mail survey of our members conducted last year, CPSA found that nearly 85% of respondents regarded ongoing access to cash as important or very important. A recent survey from CHOICE of almost 13,000 people likewise found that 97% of respondents wanted businesses that provide essential goods and services to be covered by a cash acceptance mandate.
How will the mandate work?
While the Treasury has not yet put forward a plan for the mandate, the consultation suggests that it will only apply to larger businesses providing essential goods and services where payment is in-person (rather than through an online transaction). Essential goods and services include food and groceries, utilities and telecommunication services, childcare, medicines and medical expenses, postal services, compulsory insurance, fuel and automative repair and maintenance services.
The Treasury has also suggested exempting businesses with an annual turnover of less than $10 million, presumably to ensure that small businesses do not bear undue costs for cash-in-transit services. Additionally, the consultation has sought feedback on whether the mandate may only require businesses to accept cash during certain hours of the day (e.g. 6am-10pm), for purchases below a certain value or both.
CPSA’s position
During CPSA’s annual conference last year, delegates from branches throughout NSW voted to urge the Government to ensure that it be illegal for any business to refuse an in-person cash transaction up to $1,200, and that it be illegal for cash transactions to attract a surcharge. This policy formed the basis of CPSA’s submission to the Treasury’s consultation. While our submission also recognised that small businesses could face higher costs for managing cash and contracting cash-in-transit services, CPSA recommended that the Government explore the possibility of nationalising the cash-in-transit network to prevent it from being a private monopoly and to ensure that small businesses can access it affordably.
The mandate is due to come into effect on 1 January 2026, but this may change depending on the outcome of the election.
CPSA’s submission can be found here.
