The Treasury of Australia has recently concluded a major consultation with business and community stakeholders regarding a proposed new law to mandate cash acceptance in Australian businesses that sell essential services such as food, fuel, and medicines. This consultation focused on the proposal outlined in a formal consultation paper released late last year (see Consultation Paper: Mandating Cash Acceptance).
ACAPMA submitted a formal response to this process, recognizing the significant implications for fuel retail businesses in Australia.
The Treasury paper notes that while Australian consumers are increasingly using digital payments, cash continues to play an important role in the Australian community. Approximately 1.5 million Australians use cash for more than 80% of their in-person payments, and cash also provides an easily accessible backup to digital payments during natural disasters or digital outages.
According to the most recent data, up to 94% of businesses still accept cash. The Treasury paper states that the primary objective of mandating cash acceptance for essential purchases, such as groceries and fuel, is to ensure that the shift toward digital payments does not disadvantage those who rely on cash.
“ACAPMA has expressed support for the underlying objectives of the proposed new laws, but we have raised a series of concerns about the need for the Australian Government to simultaneously address issues relating to the growing difficulties faced by many businesses in accessing cash banking services—particularly in regional and rural Australia,” said ACAPMA CEO Mark McKenzie.
The implementation of a cash mandate poses the greatest risk to businesses operating in ‘thinner’ regional and rural markets, where access to cash services is becoming increasingly constrained. These areas face significant challenges due to the declining availability of banking services and rising costs of handling cash owing to the progressive withdrawal of banking services in these markets.
As a result, a mandated requirement to accept cash in all transactions may contribute to increased product prices, further exacerbating affordability concerns for consumers in regional and remote areas.
One particular area of concern in the Treasury consultation paper relates to a proposal for private enforcement of any new laws. Specifically, the discussion of options for private enforcement included the following statements:
“Should businesses fail to comply with the cash acceptance mandate, consumers could be given a right of action to enforce compliance. Remedies available to the consumer could include declarations, injunctions, and damages. To strengthen deterrence, remedies could also include punitive damages where there was systematic or egregious non-compliance. Private enforcement could be pursued either individually or collectively through a class action. All actions would be funded privately.”
“The suggestion that any new law, whether legislated by the Commonwealth or any State/Territory Government, be enforced by private actions including collective class actions is extraordinary and entirely inappropriate,” said Mark McKenzie.
“Putting consumers in charge of the enforcement of new laws risks an escalation in tensions between staff and customers, while successful class actions mounted against businesses selling food and fuel risk dramatic increases in the costs of these products in the future as businesses seek to insure against these risks and/or recover costs of successful actions,” added Mark.
ACAPMA maintains that the cost of supporting cash transactions is already rising for businesses in the fuel industry, both in terms of direct financial costs and productivity losses. This challenge is particularly pronounced in smaller regional centres and rural markets, where banking services are limited—or, in some cases, unavailable altogether.
In this context, imposing a cash mandate is not a cost-neutral initiative. ACAPMA believes that any such legislation must therefore be accompanied by complementary measures by the Australian Government to prevent cost pass-through to consumers—especially in high-volume, low-margin industries like fuel retailing, where significant increases in business costs inevitably translate into higher prices for goods and services. Potential solutions include:
- Shared Banking Services: ACAPMA encourages consideration of shared banking models, as seen in the United Kingdom, where multiple banks co-locate within regional hubs to provide cash-handling services for businesses and consumers alike.
- Cash Recycling Initiatives: ACAPMA is currently investigating electronically enabled cash recycling solutions, which would allow businesses and consumers to circulate cash more efficiently within regional communities. This approach could help reduce reliance on CIT services while ensuring businesses maintain access to cash as needed.
Members can download a copy of ACAPMA’s submission to the Australian Government’s consultation on mandating cash acceptance, and other recent ACAPMA Submissions here.
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