The Australian Competition and Consumer Commission (ACCC) has paved the way for the continued distribution of cash across the country.
Its latest ruling is intended to allow banks to get on with the task of ensuring cash transactions remain accessible to those who choose to use them.
On Friday, the ACCC issued a draft determination to authorise the Australian Banking Association to continue to develop ways of ensuring the ongoing distribution of cash across Australia.
This includes taking steps to ensure cash-transporting services continue even if current operations were to be suspended or disrupted.
Cash not paying all bills
This month, Australia's leading cash transporter Armaguard reached a new pricing deal with its main customers - banks and retailers - after earlier warning it was at risk of ceasing operations due the declining use of cash.
Cash use in Australia has gone from 70% of all consumer payments in 2007 to 13% in 2022, according to the latest official RBA data.
In 2023, the ACCC gave the green light for Armaguard to merge with its main rival Prosegur, creating a near-monopoly, in a bid to keep a national cash distribution service afloat.
Despite this, Armaguard warned its business model remained unsustainable, with the company threatening to stop delivering cash to all parts of the country.
This forced the hand of its biggest eight customers - the big four banks, Coles, Woolworths, Wesfarmers, and Australia Post - to effectively inject a total of $75 million into the business.
Cash an 'essential service'
Under Armaguard's new contract pricing model, cash distribution will effectively be regarded as an essential service with a utility-style pricing schedule.
One of the ACCC's conditions specifically requires banks to develop ways of protecting cash use in regional and remote areas where there are fewer ways to access it.
Understandably, this is a particularly unprofitable segment of Armaguard's business but has been singled out as a priority under ACCC's proposed authorisation.
"Public access to physical currency is incredibly important, especially for consumers who are reliant on cash payments, including those in regional and remote areas," ACCC deputy chair Mick Keogh said.
Keeping cash as king - or thing
So far, the ACCC has granted four authorisations in a bid to maintain cash distribution in the interests of public benefit.
These effectively permitted the Armaguard merger, then allowed banks and retailers to collaborate and provide financial contributions to the company.
However, the ACCC stressed its mandate does not extend to any input on the pricing agreement reached.
Friday's so-called 'draft determination' effectively allows the Australian Banking Association to get on with implementing the pricing agreement although the ACCC will still hear submissions until 14 November before delivering its final authorisation.
It comes in the wake of the federal government releasing draft regulations to ensure people who rely on cash can still use it for essential purchases.
However, these also include exemptions for small businesses who find it more difficult to trade in cash.
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