The Federal Government has announced a big change for how businesses handle payments. From 1 January 2026, businesses selling essential items like groceries and fuel will be required to accept cash. The goal? To ensure no Australian is left behind in the shift to digital payments.
While details will be finalised in 2025, this move highlights the importance of cash for many Australians, particularly older people and those in rural and remote areas. Let’s unpack what this means for our country.
Why Cash Still Matters, Especially for Older Australians
For older Australians, cash isn’t just a way to pay — it’s a symbol of independence. The Council on the Ageing (COTA) Australia says that 50% of Australians over 65 and 35% of those aged 50–65 use cash regularly. Chief Executive Patricia Sparrow put it best:
“For many older Australians, cash is a cornerstone of financial independence, not just a payment tool. There are very valid reasons why people need to and prefer to pay with cash, including privacy and security concerns.”
Without easy access to cash, these groups risk losing their financial autonomy. This is particularly true in remote regions, where internet and mobile payment services may still be unreliable.
The Essentials: Who Does This Impact?
The mandate targets businesses selling essential goods and services, such as supermarkets and fuel stations. However, small businesses will likely have exemptions to avoid putting extra pressure on their operations.
The government is balancing the shift to digital payments while ensuring that cash remains an option for those who rely on it. Final decisions on which businesses are affected will come in 2025 after a thorough consultation process.
Is Australia Moving Towards a Cashless Society?
In countries like Sweden and Norway, cash is nearly obsolete. But is Australia headed the same way? Not so fast.
While digital literacy is improving among older Australians, and internet access is expanding in rural areas, cash still plays a crucial role. It’s a reliable backup during emergencies and a secure, private payment option for those wary of digital systems.
That said, the generational shift is undeniable. Younger Australians are increasingly preferring to pay by cards and mobile payments. Over time, as older populations adapt and infrastructure improves in remote areas, we might see a significant drop in cash usage in these groups. But will it disappear entirely? Only time will tell.
What’s Driving This Mandate?
The government’s decision stems from the need to protect vulnerable populations. With declining cash access and acceptance across the country, the mandate aims to:
- Ensure financial inclusion for older Australians.
- Support remote and rural communities with limited digital payment options.
- Provide a reliable backup payment system during natural disasters or outages.
Even as most of us turn to cards or mobile payments, cash is still a lifeline for many. Did you know 1.5 million Australians use cash for over 80% of their transactions? It's not just about preference — it’s about access.
The Future of Cash in Australia
As digital payments grow, the role of cash in our society will continue to evolve. While some predict its eventual decline, others argue that cash will always have a place for privacy, security, and accessibility reasons.
For now, the government’s cash mandate ensures that no Australian is left behind in this digital transition. It’s a step towards a more inclusive economy that balances the needs of all generations.
The Cost of Cash for Businesses
The cost of cash for businesses involves several components that can significantly impact their bottom line. One of the primary expenses is cash handling, which includes the purchase and maintenance of cash tills and safes, as well as the need for security measures like locks and alarms. In addition, businesses must account for secure transport costs, including fees for cash-in-transit (CIT) services, insurance for transportation, and the potential for losses during transit. Staff costs are also a consideration, as employees must spend time counting, reconciling, and managing cash, which requires training and can lead to human error. Furthermore, businesses may face banking fees for depositing cash, obtaining small denominations, and other related services.
When evaluating whether cash is worth it, businesses must weigh the benefits and drawbacks. On the positive side, accepting cash allows businesses to cater to customers who prefer or exclusively use cash, avoids transaction fees associated with card payments, and provides immediate access to funds. However, the security risks of theft, time-consuming cash management processes, and additional costs for handling and transporting cash can make it less appealing. For many businesses, particularly those in industries where cash is still common, the advantages of accepting cash often outweigh the costs. However, as digital payments continue to grow, some businesses may find that the expense and risks associated with cash handling no longer justify the volume of cash transactions. The decision to accept cash should therefore be based on a thorough analysis of customer preferences, transaction volumes, and the specific costs involved.
Nexxtap and Cardless Transactions
While Nexxtap is focused on facilitating card transactions, it complements the cash mandate by supporting businesses in adapting to a cashless future. As the government ensures inclusivity for cash users, Nexxtap empowers businesses to provide seamless card payment options for customers who prefer digital methods. By turning your Android phone into a SoftPOS, Nexxtap helps businesses offer fast, secure, and hardware-free card payment solutions, bridging the gap for those embracing cashless convenience.
FAQs
1. Why is this cash mandate being introduced?
To ensure that all Australians, especially older people and those in rural areas, have access to payment methods that suit their needs.
2. What is considered an “essential service”?
Businesses that sell items like groceries and fuel. The exact details will be confirmed in 2025.
3. Will small businesses need to comply?
No, small businesses are expected to receive exemptions to reduce the impact on their operations.
4. When does the mandate start?
The cash mandate will commence on 1 January 2026.
5. Is cash going to disappear in Australia?
Not anytime soon. While digital payments are growing, cash remains essential for older Australians and during emergencies.
This cash mandate reflects a balanced approach to progress, ensuring that as Australia becomes more connected, no one is left behind. Whether cash remains a cornerstone or gradually fades, it’s clear that its importance isn’t going away just yet.