ACCC gives interim authorisation to financially prop up struggling cash mover Armaguard

The competition watchdog has granted the Australian Banking Association, major banks and retailers the go-ahead to plough $50 million into struggling cash-transportation firm Armaguard.

ANZ, Commonwealth Bank, National Australia Bank, Westpac, Australia Post, as well as retailers Coles, Wesfarmers and Woolworths have agreed to provide financial support to Armaguard for up to 12 months.

“At this time, we have only provided interim authorisation on the financial support aspect of this package,” acting Australian Competition and Consumer Commission chair Mick Keogh said on Wednesday.

“We consider that the financial assistance to Armaguard increases the likelihood of a more sustainable supply of wholesale cash distribution services as well as access to cash by businesses and members of the public across Australia.”

Armaguard was on the brink of collapse before the deal was announced at the end of June and there were concerns people and businesses might have to make do without access to notes and coins — currently making up for about 7 per cent of payments in Australia.

Armaguard also rejected a $26m deal offered by the same group of major banks, supermarkets and retailers earlier this year.

The cash and cash transport industry has been in crisis for some time after the merger of Armaguard with rival Prosegur and with plummeting levels of cash use.

The ACCC is seeking views from interested parties about operational sustainability, efficiency measures can be taken to support the industry, as well as the independent pricing mechanism aspects of the proposed deal.

“In assessing those measures, we expect the ABA, major banks and retailers and Armaguard to commit to consulting with other affected parties in a meaningful way so as to ensure the interest of communities across Australia, particularly those in regional and remote areas, are taken into account,” Mr Keogh said.