Businesses selling essential goods and services such as groceries, medicines and fuel will be forced to accept cash from their customers unless granted a special exemption, under a government mandate to take effect from 1 January 2026.
In a move designed to taper the phase-out of cash and ensure those who rely on it can still use it for the near future, the federal government will require certain businesses to take cash payments. But others, including many small businesses, will be exempt from the measure.
“People are increasingly using digital payment methods but there is an ongoing place for cash in our society,” the treasurer, Jim Chalmers, and the assistant treasurer, Stephen Jones, said in a joint statement.
“Mandating cash for essential purchases, such as groceries and fuel, means those who rely on cash will not be left behind. For many Australians, cash is more than a payment, it’s a lifeline.”
The ministers have also confirmed that cheques will stay in circulation for now but then cease to be accepted as legal tender. They will no longer be issued nationwide after 30 June 2028 and no longer accepted after 30 September 2029.
Treasury will begin consultations to determine what will qualify as essential goods and services and which businesses should be forced to accept cash payments. The decision will take into account a business’ size and location along with its capacity to handle cash and what constitutes a reasonable distance for someone to travel to find an essential service that accepts it.
The government expects that supermarkets, banks, pharmacies and petrol stations – along with providers of utilities and health services – are likely to be included in the mandate, which will be set by regulation so it can be amended over time.
“The consultation will consider the needs of those who rely on cash, including people in regional areas and those unable to use digital payments, as well as the impact on businesses, particularly small businesses,” the ministers’ statement said.
The use of cash dropped off after the Covid pandemic began. Since then, some European countries have mandated its ongoing acceptance by certain businesses and agencies. Others, including the US and New Zealand, are considering doing the same.
About 1.5 million Australians still use cash for more than 80% of their in-person payments, with the greatest reliance in regional areas. It also serves as a back-up to digital payments during natural disasters, blackouts and internet outages. Government data indicates up to 94% of businesses still accept cash.
There is no law forcing businesses to take it, only the requirement that if they refuse, they must offer an alternative payment method – such as Eftpos or credit card – at no fee to the customer. Guardian Australia has been told that businesses granted exemptions under the new mandate will still be subject to that requirement.
Under its related cheques transition plan, to be released on Monday, the government aims to ensure there is also a gradual transition away from the use of cheques – rather than their sudden withdrawal – and support for those who need help shifting to other payment methods.
Chalmers has written to the chief executives of Australia’s four biggest banks outlining the government’s expectation that they will take part in a coordinated transition program.
“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,” the ministers said.
