New laws to keep cash
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The Federal Government says Australians’ right to pay with cash for essentials will be legally protected.
The government has announced policies to mandate cash acceptance for essential purchases, while also phasing out cheques by 2029.
The measures aim to modernise payment systems but ensure equitable access to traditional methods.
By 1 January 2026, businesses selling essential goods and services - such as groceries, fuel, and medicines - must accept cash, unless exempt. Small businesses may qualify for exemptions.
The policy is designed to protect the 1.5 million Australians who rely on cash for over 80 per cent of their transactions.
“Mandating cash for essential purchases means those who rely on cash will not be left behind. For many Australians, cash is more than a payment method; it’s a lifeline,” Treasurer Jim Chalmers said in a statement.
Treasury will consult on the mandate by late 2024 to determine eligible businesses.
Key considerations include regional accessibility, businesses’ capacity to handle cash, and operational impacts.
Countries like France, Spain, and Norway already mandate cash acceptance.
In Australia, 94 per cent of businesses currently accept cash, though there is no law requiring it if alternative fee-free payment options are available.
The mandate is also meant to acknowledge the critical role of cash during crises, such as natural disasters or system outages.
Cheques will no longer be issued after 30 June 2028 or accepted after 30 September 2029. With cheque use declining 90 per cent over the last decade, the plan aims to ease users’ transition to alternative methods. Banks are expected to support this transition as part of a coordinated effort.
“Banks have a responsibility to support cheque users as part of this smooth transition,” Chalmers stated in letters to the CEOs of Australia’s four largest banks.
The initiatives are part of the Government’s Payments Strategic Plan, focused on improving efficiency and accessibility in the financial sector.
Other measures include regulating new payment technologies, addressing excessive surcharges, and replacing legacy systems like the Bulk Electronic Clearing System.
“These reforms are about modernising Australia’s payments system to ensure our financial sector is competitive, efficient, and delivering for the economy and the Australian people,” Chalmers said.
