Treasurer Jim Chalmers to force businesses to accept cash under proposed new mandate

Businesses selling essential items like food and fuel would be forced to accept cash payments under a Federal Government plan to protect a financial “lifeline” for many shoppers.

The Government wants to legislate a cash mandate to ensure customers who rely on or choose to use cash aren’t “left behind” amid the rapid shift to digital payments.

An estimated 1.5 million people are still using cash for more than 80 per cent of their in-person payments, according to Government statistics.

While figures show 94 per cent of businesses still accept cash, the Government wants to guarantee it remains a payment option, particularly for essential items such as food and groceries, medicines, and basic banking services.

There is currently no legal requirement for businesses to accept cash if other forms of payment, such as credit card or EFTPOS, are available.

Cash offers a back-up to digital payments during natural disasters and telco outages.

“Mandating cash for essential purchases, such as groceries and fuel, means those who rely on cash will not be left behind,” Treasurer Jim Chalmers and Minister for Financial Services Stephen Jones said in a statement.

“For many Australians, cash is more than a payment method, it’s a lifeline.”

The COVID-19 pandemic accelerated the shift to a cashless society as shoppers ditched coins and notes in favour of digital options.

The decision of some businesses to go cashless prompted a backlash from customers, with Perth’s Mary Street Bakery deciding to reverse the policy after customers started abusing bakery staff.

The Federal Government will start consultation before the end of the year to determine which businesses and services should be captured under the proposed mandate.

The consultation process will consider exemptions for small businesses, including whether only large supermarkets with the capacity to hold cash should be subject to the new regime.

The Federal Government is hoping the mandate is effective by January 1, 2026, subject to the outcomes of consultation.

Several US States and countries including Spain, France, Norway and Denmark have cash mandates and several other jurisdictions, including New Zealand, are considering following suit.

The Federal Government is also pushing ahead with a plan to make cheques extinct by the end of the decade.

Cheques will stop being issued by June 30, 2028, and stop being accepted on September 30, 2029 under the Government’s plan.

The Treasurer has written to the chief executives of the big four banks to reinforce the Government’s expectation cheque users will be supported through the transition.

The use of cheques has fallen by about 90 per cent in the past 10 years and now represents just 0.1 per cent of non-cash payments.

“These reforms are all about modernising Australia’s payments system to ensure our financial sector is competitive, efficient and delivering for the economy and the Australian people,” Dr Chalmers said.