The Albanese Government is taking action so Australians can continue to pay with cash for essential items if they want to, while also ensuring an orderly transition to phase out cheques.
People are increasingly using digital payment methods, but there is an ongoing place for cash in our society under the Albanese Government.
The Government will mandate that businesses must accept cash when selling essential items, with appropriate exemptions for small businesses.
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 method, it’s a lifeline.
Around 1.5 million Australians use cash to make more than 80 per cent of their in‑person payments. Cash also provides an easily accessible back‑up to digital payments in times of natural disaster or digital outage.
According to the most recent data, up to 94 per cent of businesses continue to accept cash, and we want to see cash acceptance continue particularly for essentials.
Other economies have already put in place cash mandates including Spain, France, Norway and Denmark, and they are also in place in some US states including Colorado, Illinois, Montana, Massachusetts, New Jersey and New York.
Treasury will commence consultation before the end of 2024 on which businesses supplying essential goods and services should be covered by the mandate.
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.
It will also cover what further steps are required to ensure the long‑term and sustainable distribution of cash to enable adequate access.
Final details of the mandate will be announced in 2025. Subject to the outcomes of consultation, the mandate would commence from 1 January 2026.
The Government is also releasing today its Cheques Transition Plan, which will ensure the phase out of cheques in an orderly and planned way.
The Plan includes a long lead time for customers and businesses to adjust to alternative payment methods with cheques still being issued and accepted for several years.
Under the Plan, cheques will only stop being issued by 30 June 2028 and stop being accepted on 30 September 2029.
The usage of cheques has declined by 90 per cent in the last ten years and many banks and financial institutions are ending cheque issuance for new customers.
To manage this industry trend, the Government is acting to give customers and businesses the certainty and the assistance they need to switch to other payment methods.
Banks also have a responsibility to support cheque users as part of this smooth transition.
The Treasurer has written to the CEOs of the four major banks outlining the Government’s expectation that they participate in the Australian Payments Network transition coordination program and provide adequate support to all cheque using customers to ensure their continued financial inclusion.
The release of the Plan follows extensive discussion with cheque users, financial institutions and other key stakeholders over the past 12 months.
The Albanese Government continues to make progress towards a modern, world‑class and efficient payments system that is safe, trusted and accessible as part of our Payments Strategic Plan.
We are cracking down on excessive surcharging, expanding the RBA’s powers to regulate new payments technologies, supporting an industry‑led transition away from the Bulk Electronic Clearing System and have committed over $180 million since being elected to tackle scam activity across the economy.
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.
