When was the last time you paid for something with cash? For me, it was a few weeks ago. There’s a café near my place that, unusually for this day and age, has a cash-only policy, which I forget about every time I go in there. A ten dollar note hiding at the back of my wallet saved the day, getting me the two scoops of gelato that I was after. One scoop of chocolate and one scoop of caramel, in case you were wondering.
More often though, consumers find themselves facing the opposite problem. These days, you’re much more likely to go into a shop and find that they only accept card payments. And that can leave the people who rely on cash out in the cold.
Across Australia there are around 1.5 million people who still use cash almost all the time. Some of them need to use it because they live somewhere with a poor internet connection or no internet at all, others aren’t comfortable with online banking, and others use cash as a way to budget week to week.
It can also be a critical backstop when things go wrong. Cash can allow us to continue to buy essentials when a natural disaster or an outage has made digital services unavailable, and it can act as a security measure for people who are experiencing family violence, to avoid transactions being tracked or money being transferred out of their account.
This may come as a surprise, but even though cash is legal tender, consumers in Australia have never previously had the legal right to use it. So late last year, the government introduced new regulations requiring major supermarkets and petrol stations to accept cash payments, for transactions of $500 or less that are made between the hours of 7am and 9pm. The regulations commenced on 1 January this year, and on 1 July the enforcement powers came into effect. That means that as of last week, if a supermarket or petrol station refuses to allow a customer to pay with cash, they could find themselves getting a (metaphorical) knock on the door from the ACCC, and could face penalties of up to $198,000.
If a supermarket or petrol station refuses to allow a customer to pay with cash, they could find themselves getting a (metaphorical) knock on the door from the ACCC, and could face penalties of up to $198,000
We have mixed feelings about where the law has landed on this issue. We campaigned for a cash acceptance mandate, and we were glad to see the government take a form of action to recognise the barriers that cash users are running into. However, we were disappointed to see them take such a narrow view of what constitutes an essential.
I’m prepared to grudgingly accept that a scoop of gelato isn’t an essential item. But many genuinely essential products and services are still not covered by the new cash acceptance mandate, including medication and medical supplies, telecommunications equipment, public transport, car parts and repairs, and even clothing and shoes.
This has created some strange quirks in the way the rules work. Supermarkets are covered but pharmacies are not, so Australians now have the legal right to use cash to buy paracetamol but not prescription medication. Petrol stations are covered but car repairers aren’t, so Australians now have the legal right to pay cash to fill their tank, but not to have a flat tyre replaced, even though both are necessary to get where they’re going. And someone going to the same place by the train or bus has no right to use cash for their ticket.
As for clothing, well I was pretty surprised to learn that the government doesn’t think that’s essential.
First of all, where the cash acceptance mandate is now in effect, we need to see it rigorously enforced. We’ll be watching very closely to see that supermarkets and petrol stations are following the new rules, and we’ll be encouraging the ACCC to step in if any businesses aren’t.
We’re also going to keep pushing the government and the banks over the closure of local bank branches. Since 2017, Australians have seen more than 2400 bank branches and more than 8600 bank-owned ATMs disappear. The legal right to use cash is a lot less useful if people can’t access it in the first place.
We’re going to continue to make the case for a mandate that covers a fuller range of essentials
Beyond that, we still think the mandate needs some major improvements. CHOICE campaigns rely on the intel and experiences of readers and supporters. If you’ve tried to pay cash somewhere and been refused, send us an email at [email protected] and let us know.
We’re going to continue to make the case for a mandate that covers a fuller range of essentials, so that those who need to can keep using cash for the things we can’t live without.
Morgan Campbell works on a range of CHOICE’s campaigns, with a particular focus on banking and financial services.
In addition to roles with Australia’s financial regulators, Morgan has previously worked as an advisor to a NSW Opposition Leader, and as Deputy Chief of Staff to a Federal Government Minister.
Morgan Campbell works on a range of CHOICE’s campaigns, with a particular focus on banking and financial services.
In addition to roles with Australia’s financial regulators, Morgan has previously worked as an advisor to a NSW Opposition Leader, and as Deputy Chief of Staff to a Federal Government Minister.
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