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It’s increasingly common for businesses to only accept digital payment methods, whether that’s paying with your phone or your credit card.
But cash is widely used in some parts of the country, as well as among older Australians.
Chris Grice, chief executive of National Seniors Australia, says for older Australians it’s a lifeline.
“Cash is something that is important to a significant number of older people in the community. And even though the number in the scheme of things, I think it was something like the treasurer said, 1, 5 million people were still using cash About 80 percent percent of that number, people are over 65 so it’s still very, very important for the older cohort. because they feel safer with it and that they are also challenged by the challenges of cybersecurity today.
The Reserve Bank says around 94 per cent of businesses still accept cash, compared to 99 per cent just before the pandemic.
But there is currently no legislative requirement for Australian businesses to deal in notes and coins.
Anne Nalder, chief executive of the Small Business Association of Australia, says it’s often easier for businesses not to have one on site.
“Using a card is now convenient for both the business and the consumer. To have cash on your premises, keep in mind that many years ago when cash was dominant, business owners had to send their staff to a bank branch They would have to get a certain amount of notes and coins, et cetera, for cash flow So it takes time and effort And also keep in mind. mind that a lot of branches are closing now, so you can do. I don’t go to your local bank, so they would consider convenience.”
Today, the federal government announced a new mandate that will require businesses to accept cash when selling essential products, including groceries, health care, pharmaceuticals and fuel.
And it has released a check transition plan that will aim to give customers a long period of time to move away from them – even though check use has already declined by 90 percent over the past ten years.
Under this part of the plan, checks will stop being issued completely by June 30, 2028 – and stop being accepted on September 30 of the following year.
But the focus remains on cash.
Treasurer Jim Chalmers says millions of Australians still rely on banknotes, even as the economy becomes increasingly digitalised.
“Our goal on payments is to modernize our financial system, but to do so in a way that leaves no one behind, to ensure that cash plays a continued role, and to ensure that as we’re phasing it out We’re doing it over a reasonable, longer period of time We know now that most people like to pay digitally, and we know that the trend is towards digital payments, but nonetheless, about a million and a half Australians. pay mainly in cash.
Cash money orders already exist in parts of the United States, as well as Spain, France, Norway and Denmark.
The Australian government will begin a consultation process before the end of this year.
The consultation will consider the needs of those who rely on cash, including people in regional areas and those who cannot use digital payments, as well as the impact on small businesses – and which ones will be covered by the mandate.
And the treasurer says they need to think about what will happen to businesses that refuse to accept cash.
“When it comes to sanctions, the main difference between what we are proposing today and some of the sanctions that have been proposed elsewhere in Parliament. Andrew Gee, who has done a lot of well-intentioned work, I think, in this area. Our The intention is to try to get as many businesses selling essential products to accept money as possible. But we don’t want to penalize small businesses. We want to find an appropriate way to exclude small businesses. recognize regional and other pressures, to ensure that as many businesses as possible selling essential products accept money sure that the focus It is not about sanctions The aim is to ensure that medium and large businesses which. sell essential products accept cash.
18 percent of small businesses are owned by migrants.
Ms Nalder says it is essential that the government properly communicates any potential changes to small business owners, particularly those who do not speak English as a first language.
“Business owners will have to learn to adapt. There will be certain types of businesses that will still need to have cash on their premises, but not all businesses. So I believe we need to have an advertising campaign, an educational campaign. Once “The laws are passed, and as they are passed, business owners will need to be informed of what they need to do.”
Mr Grice says potential customers will also need support from the banking sector regarding the phasing out of checks as well as the use of cash.
“Education and support is not being provided to the full extent by the entire banking community. Some banks are stepping up and supporting fundamentally, but we are also not seeing a dramatic change and so we continue to maintain circulation liquidity is of crucial importance.
Opposition Leader Peter Dutton criticized the government’s proposal, calling it “nothing more than a thought bubble.”
This criticism was echoed by opposition Finance spokeswoman Jane Hume, who says the announcement does not benefit those struggling with the cost of living.
“This is simply a plan for a plan. Yet another consultation for something that will only come into force in 2026. This seems to me like a government fighting for an economic agenda because it has lost tackling inflation, which is the number one priority problem for Australians.
But Greens senator Sarah Hanson-Young suggested the plan had some merit – if vulnerable groups are not harmed by the mandate.
“The Greens are concerned that some people, particularly those in Australia’s oldest age group, need access to cash and this should be available. So we will work with the government to ensure that older Australians and those in vulnerable positions who need cash have it.”
